Is the "Currency Debasement Trade" Wrong? JPMorgan: Don't Rush to Short the Dollar, Better to Short Low-Yielding Currencies

JPMorgan believes the core logic of the "currency debasement trade" is that declining purchasing power favors hard assets like gold, but this does not necessarily mean the dollar is bound to collapse. Currently, the dollar's real yield and interest rate differential advantages are at multi-decade highs, and its valuation is below fair value, making a direct short on the dollar unwise. A better strategy is to go long the dollar and short low-yielding, economically sensitive currencies, though the yen is a major exception.