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, and that decline has been losing momentum through 2026. By August 2026 the USD REER stood at 106.70, down 1.1% from 107.94 a year earlier, a much smaller year-on-year drop than the 7.1% and 7.7% declines recorded in January and February, and briefly a 0.9% year-on-year gain in July. From a post-crisis trough of 78.42 in July 2011, the USD REER appreciated 46% in real trade-weighted terms at its peak (114.5, January 2025); the correction that followed has stalled rather than deepened, leaving only a partial reversal of that earlier gain and a modest, incomplete easing of the earnings headwind facing American multinationals.

The Japanese yen's broad REER averaged 66.14 in the 2026 year-to-date period — 51% below its post-crisis peak of 136.04 reached in October 2011, and in July 2026 the index touched 65.24, its lowest reading since the BIS broad series begins in 1994.

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; Aug 2026: 106.70): Broad REER peaked in January 2025 at 114.50; the YoY decline narrowed from 7.7% in February 2026 to 1.1% by August, indicating the dollar correction has largely stalled through mid-2026 rather than continuing to deepen
• EUR (2025 avg: 102.74; 2026 YTD: 103.10): Up only 0.4% from the 2025 average, a much slower pace of real appreciation than 2025 itself delivered; recovered from the 92.07 trough of April 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: 72.50; 2026 YTD: 66.14): 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: 111.45): Broadly stable; well above the post-referendum low of 94.13 in October 2016, though still below the 2015 average of 115.42
• CNY (2025 avg: 88.56; 2026 YTD: 91.28): Modest recovery continuing; PBoC managed depreciation easing slightly as trade tensions shift the currency policy calculus

The EUR REER's 2026 YTD average of 103.10 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 stalled dollar correction still modestly supports European asset valuations expressed in USD, though that support has slowed markedly relative to last year. The USD REER's stabilisation and the EUR REER's modest appreciation represent an ongoing, if now 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's correction has stalled. 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 modest USD pullback since early 2025 offers only incremental relief and 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.