This page looks at the relationship between currency movements and international equity investing. The left-hand side shows a time series of the U.S. dollar, measured against a basket of its major trading partners, adjusted for inflation. The annotations show the subsequent performance of international equities versus U.S. equities after a peak or trough in the dollar in the last 50 years. As you can see, international tends to underperform the U.S. when the dollar is very weak and strengthens, but outperforms when the dollar is very strong but weakens. On the right-hand side, we show returns for the MSCI All Country World ex-U.S. Index and illustrate the impact of dollar moves on international equity returns. During times when the U.S. dollar was strengthening, U.S.-based investors saw a drag on their international returns.