This is Money Podcast Is the weaker US dollar bad for investors and why is Vanguard reducing UK bias?
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Jan 23, 2026 They unpack the impact of a weaker US dollar on UK investors with large US exposure. They explain Vanguard’s decision to cut UK bias in its LifeStrategy range and what alternatives to consider. They debate higher mortgage multiples and what that means for affordability. They cover retirement saving targets by age and share money lessons from Joanna Page’s family.
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Why The Dollar Is Losing Ground
- The US dollar has fallen because demand for dollar assets has weakened, not because the dollar is 'dead'.
- Political pressure on the Fed and shifting reserves into gold and other assets are amplifying the dollar's decline.
US Weighting Masks Currency Risk
- Many global tracker funds are heavily weighted to US stocks, so currency moves significantly affect UK investors' returns.
- UK holders of US-dollar returns saw much lower pound returns after the dollar weakened last year.
Manage Currency Risk Deliberately
- Consider currency-hedged funds to remove FX swing effects, but expect hedging costs and potential underperformance in years the dollar strengthens.
- Alternatively, rebalance away from US-heavy passive weightings only if you're willing to make active allocation decisions.