ELD Asset Management Discusses How Tech Stocks Can Navigate the Challenges of a Strong US Dollar: Key Drivers of Growth, Innovation, and Resilience Expected to Support the Sector Despite Currency Pressures in 2025
Singapore-based ELD Asset Management, today shared its perspective on the outlook for technology stocks in the face of a sustained surge in the strength of the US dollar that has persisted since Donald Trump won the 2024 U.S. Presidential election.
The US dollar’s strength has been broadly attributed to investor confidence in the Trump administration’s economic policies, which are expected to prioritise growth and stability. There is also the possibility that the greenback will benefit if stubbornly “sticky” inflation limits the number of times the US Federal Reserve cuts interest rates in 2025. However, a stronger dollar typically presents challenges for technology companies, especially those with significant international revenues, as it can impact their competitiveness in global markets.
Positive outlook maintained
Despite these headwinds, ELD Asset Management says it remains optimistic about the long-term prospects for the technology sector. The firm points to several key factors it believes will support continued growth in technology stocks.
Demand & innovation
The relentless pace of innovation in areas such as artificial intelligence, cloud computing, and cybersecurity continues to drive demand for technology solutions. These trends are expected to persist, providing robust growth opportunities for companies leading in these fields.
Adaptability
The technology sector has demonstrated remarkable resilience and adaptability in navigating currency fluctuations and other macroeconomic challenges. Companies with strong fundamentals and global strategies are well-positioned to mitigate the impact of a stronger dollar.
Government policy support
The anticipated policy direction under President Trump’s administration, focusing on domestic technology infrastructure and innovation, may offer additional support to the sector, potentially offsetting some of the negative effects of a stronger greenback.
Strategic approach for investors
ELD Asset Management advises investors to maintain a balanced approach when considering exposure to technology stocks. Although short-term currency fluctuations may pose challenges, the underlying growth drivers for the sector remain compelling.
“As we navigate this period of dollar strength, we’re strongly urging our clients to focus on the long-term growth potential of technology companies,” said George Palmer, ELD Asset Management’s Director of Private Clients. “Our researchers continue to discover significant opportunities in the sector, especially among companies that are innovating and expanding their market reach,” he added.
About ELD Asset Management:
At ELD Asset Management, we combine research-driven strategies, personalised solutions, and a commitment to transparency to help you achieve your financial goals. With a global perspective and local expertise, we offer tailored investment solutions that prioritise long-term growth and stability.