BIS Real Effective Exchange Rates (REER)

The US dollar's broad real effective exchange rate averaged 109.5 in 2025 — among the highest levels of the past decade — but the dollar has moved lower since. By April 2026 the USD REER had declined to 106.97, down 3.5% from 110.87 a year earlier, the fourth consecutive quarter of year-on-year decline. 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 a portion of that gain, easing the earnings headwind facing American multinationals and modestly improving US export price competitiveness.

The Japanese yen's broad REER stood at approximately 66.3 in the first half of 2026 — approximately 51% below its post-crisis peak of 135.9 reached in late 2011, making the yen one of the most competitively undervalued major currencies 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: 109.49; Apr 2026: 106.97): Broad REER peaked in January 2025 at roughly 114.5; a 3.5% YoY decline by April 2026 points to a cyclical reversal after several years of sustained appreciation
• EUR (2025 avg: 102.74; 2026 YTD: 103.15): Up only 0.4% from the 2025 average, a much slower pace of real appreciation than 2025 itself delivered; recovered from the 92.5 trough of March 2015; euro-area inflation has continued to run at or below that of trading partners even as the ECB has cut rates
• JPY (2025 avg: 72.49; 2026 YTD: 66.29): Continuing lower; at generational lows despite Bank of Japan rate normalisation; persistent weakness reflects persistent inflation differentials and BoJ easing bias
• GBP (2025 avg: 112.04; 2026 YTD: 111.22): Broadly stable; Brexit shock of 2016 has been fully reversed in real trade-weighted terms
• CNY (2025 avg: 88.56; 2026 YTD: 90.97): Modest recovery continuing; PBoC managed depreciation easing slightly as trade tensions shift the currency policy calculus

The EUR REER's 2026 YTD average of 103.15 sits only marginally above the 2025 average of 102.74 — a much shallower gain than 2025's own advance — but the direction still reflects euro-area inflation running at or below that of trading partners even as the ECB has cut rates. For currency overlay managers and cross-border M&A analysts, a stable-to-firming euro alongside a correcting dollar still modestly supports European asset valuations expressed in USD, though that support has slowed markedly relative to last year. The simultaneous USD REER correction and modest EUR REER appreciation represent an ongoing, if more gradual, rebalancing of global competitiveness dynamics through 2026.

For fixed-income investors, the elevated USD REER of the past several years remains a critical input to dollar-denominated EM debt sustainability analysis, even as the dollar corrects. Economies that borrowed in dollars during the ultra-low-rate era service those obligations with domestic currencies whose real value against the dollar has been depressed for an extended period, compressing debt coverage ratios; the current USD correction offers incremental relief but has not reversed the bulk of the prior appreciation. The BIS publishes monthly updates to the WS_EER dataset with approximately a four-to-six week lag relative to the reference month.