USD REER (Jan 2026)

106.98

Index (2020=100), broad basket

-7.2% vs Jan 2025 (115.12)

EUR REER (2026 YTD avg)

103.83

Index (2020=100), broad basket

+5.3% vs 2025 avg (103.30)

JPY REER (2026 YTD avg)

67.19

Index (2020=100), broad basket

Generational lows

USD YoY Change

-7.2%

Jan 2026 vs Jan 2025

Steepest YoY decline since 2017

Data

Year	USD	EUR	JPY	GBP	CNY
2026 (Jan–Feb)	106.43	103.83	67.19	111.37	90.06
2025	110.2	103.3	72.1	111.8	88.4
2024	109.9	101.5	70.8	110.1	91.7
2023	107.3	101.0	74.9	106.4	93.8
2022	106.7	97.0	78.8	103.3	102.1
2021	97.8	100.3	91.3	103.8	103.1
2020	100.0	100.0	100.0	100.0	100.0
2019	98.6	98.5	99.1	99.9	97.9
2018	95.8	101.1	96.2	100.2	98.3
2017	96.8	97.9	97.2	98.4	97.0
2016	97.2	96.6	102.2	103.7	100.0

About this Dataset

The US dollar’s broad real effective exchange rate averaged 110.2 in 2025 — the highest sustained level since the BIS broad basket series began — but the dollar has since moved sharply lower. By January 2026 the USD REER had declined to 106.98, down 7.2% from 115.12 in January 2025, marking the steepest year-on-year decline since 2017. From a post-crisis trough of 80.1 in 2011, the USD REER appreciated approximately 37% in real trade-weighted terms at its peak; the correction now under way has erased roughly one-third of that gain in a matter of months, compressing the headwind facing American multinational earnings and improving US export price competitiveness for the first time in several years.

The Japanese yen’s broad REER stood at approximately 67.2 in early 2026 — approximately 51% below its post-crisis peak of 135.9 reached in late 2011, making the yen the most competitively undervalued major currency on a real trade-weighted basis in the post-Bretton Woods era.

The data is sourced from the BIS WS_EER dataset, which applies a methodology consistent across all 64 economies in the broad basket. Trade weights are derived from merchandise trade flows and updated periodically to reflect shifting patterns of global commerce. Consumer price indices from each trading partner are used to convert nominal bilateral rates into real terms, capturing the inflation differential that bilateral spot rates alone cannot convey. The base year is 2020, which means each index equals 100 in that year; values above 100 indicate real appreciation relative to 2020, values below 100 indicate real depreciation.

USD (2025 avg: 110.2; Jan 2026: 106.98): Broad REER peaked in January 2025 at 115.12; a 7.2% YoY decline by January 2026 confirms the start of a cyclical reversal after four years of sustained appreciation
EUR (2025 avg: 103.3; 2026 YTD: 103.83): Up 5.3% YoY from 2025; recovered from the 92.5 trough of March 2015; ECB rate cuts have not prevented real appreciation as euro-area inflation has fallen below that of trading partners
JPY (2025 avg: 72.1; 2026 YTD: 67.19): Continuing lower; at generational lows despite Bank of Japan rate normalisation; persistent weakness reflects persistent inflation differentials and BoJ easing bias
GBP (2025 avg: 111.8; 2026 YTD est. ~111.3): Broadly stable; Brexit shock of 2016 has been fully reversed in real trade-weighted terms
CNY (2025 avg: 88.4; 2026 YTD: 90.06): Slight recovery; PBoC managed depreciation easing slightly as trade tensions shift the currency policy calculus

The EUR REER at 2026 YTD average of 103.83 shows continued strength, up 5.3% from the 2025 average of 103.30, reflecting euro-area inflation declining faster than that of its trading partners and improving competitiveness in real terms even as the ECB has cut rates. For currency overlay managers and cross-border M&A analysts, this REER configuration implies European asset valuations expressed in USD are supported by both a strengthening nominal euro and real competitive improvement — a rare combination that typically precedes inflows into European equities and credit. The simultaneous USD REER correction and EUR REER appreciation represent a notable rebalancing of global competitiveness dynamics entering 2026.

For fixed-income investors, the sustained USD REER strength is a critical input to dollar-denominated EM debt sustainability analysis. Economies that borrowed in dollars during the ultra-low-rate era now service those obligations with depreciated domestic currencies, compressing debt coverage ratios precisely as global rates normalise. The BIS publishes monthly updates to the WS_EER dataset with approximately a four-to-six week lag relative to the reference month.

Frequently Asked Questions

A real effective exchange rate (REER) is a trade-weighted average of a currency's bilateral exchange rates against the currencies of its major trading partners, adjusted for relative inflation differentials. Unlike a bilateral rate such as EUR/USD, which captures the relationship between two currencies only, a REER summarises competitiveness across an entire trade network in a single index. An increase means the currency has appreciated in real terms — the country's exports have become more expensive relative to trading partners — while a decrease signals real depreciation and improved price competitiveness. The BIS uses consumer price indices to deflate nominal rates, and weights are derived from merchandise trade flows.

The nominal effective exchange rate (NEER) is the geometric trade-weighted average of bilateral exchange rates with no inflation adjustment — it captures only the nominal currency movement. The REER builds on the NEER by dividing out the inflation differential between the home country and each trading partner. When a country runs persistently higher inflation than its peers, its NEER may be stable while its REER appreciates, eroding export competitiveness even without any movement in spot exchange rates. For long-run competitive analysis, the REER is the more economically meaningful measure; the NEER is useful for isolating the pure currency component of the adjustment.

The Japanese yen's REER has fallen approximately 51% from its 2011-2012 peak of 135.9 to 67.03 in February 2026, driven by a combination of persistent Bank of Japan monetary easing and the widest inflation differentials with trading partners in decades. In real trade-weighted terms, the yen is cheaper than at any point in the post-Bretton Woods era, which structurally advantages Japan's export sector and inbound tourism, but compresses import-cost margins and household purchasing power. For fund managers, an extraordinarily weak yen REER suppresses the returns of unhedged Japan equity exposure in foreign-currency terms, and creates significant sensitivity to any BoJ normalisation that closes the inflation and rate differential. It is also a key driver of the yen carry trade, in which investors fund higher-yielding positions with near-zero-cost yen borrowing — a structure that unwinds violently when the REER begins to recover.

A depreciated REER lowers the foreign-currency price of a country's exports, all else equal, boosting volume demand and supporting margins for domestic exporters when they repatriate revenues. The USD REER's rise from 84.4 in January 2010 to an annual average of 110.2 in 2025 — a real appreciation of roughly 31% over 15 years — chronically pressured US multinational earnings; the 7.3% YoY decline to 105.88 by February 2026 is beginning to reverse that headwind. Conversely, the yen's REER collapse has benefited Toyota, Sony, and other Japanese export-oriented corporates, whose overseas earnings translate into substantially more yen. For PE and strategic acquirers assessing cross-border assets, the REER is the correct lens for evaluating whether apparent cost advantages or profitability metrics are structurally durable or cyclically inflated by currency misalignment.

The BIS REER uses goods trade weights, which means services trade — now over 25% of global commerce — is not reflected in the basket weights. Economies with large financial services or tourism export sectors (UK, Switzerland, Singapore) may find the goods-weighted REER an incomplete measure of their effective competitiveness. The CPI deflator, while widely available and timely, is an imperfect proxy for traded-goods prices; unit labour cost-deflated REERs, which the BIS also publishes for a narrower set of economies, often tell a different story for industrial competitiveness. Finally, the base year (2020) coincides with pandemic disruptions in trade flows, which may distort weighting for some bilateral pairs. Analysts should treat the REER as a directional indicator of competitiveness shifts rather than a precise measure of equilibrium misalignment.

Data

About this Dataset

Frequently Asked Questions

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