Only if you convert it at a loss and are unable to wait for USD to recover.

If you need to wait for it to recover you have lost money.

Besides, who says it will recover?

It's reasonable to assume they're broadly stable, but being broadly stable doesn't mean a drop will "recover". There's no specific ratio that the currencies are being pushed to. Permanent changes in the baseline can and do happen.

> You're buying a share of productive capacity, the currency it is listed in doesn't matter.

But I don't own a fixed percentage of production, I own a fixed number of shares and the number of shares can change. If the number of shares doubles, then my investment is worth half as much.

yes, but could one also argue that due to currency weakening, the S&P's growth can simply be due to the weakened currency?

If I can say something has an "absolute" value of X, but I denominate it in USD, which is normally 1:1 to X, then it's value in USD in X.

but if USD drops to being worth half an X, but its absolute value hasn't changed, it will now appear to be worth 2X in USD.

so why can't one argue, if the dollar weakened by 15%, but everything else being equal, one would expect dollar denominated stocks to appreciate (in dollars) by the same amount? And if the dollar would strengthen, we would expect the stock price to depreciate?

The USD and EURO being nearly on par was the exception. And given the current admins stated goals, I’m not sure we’re going to see the USD strengthen anytime soon. In fact, it’s more likely to get weaker.

> If (and it is, admittedly, a big assumption) we assume that USD and EUR are broadly stable currencies over the long term

Yeah, er, that's a very big if. There's no real reason to assume that, and history doesn't really bear it out.

If anything in the near term you'd probably expect the USD to weaken further vs the Euro; Trump seems _very_ keen to install a fed chair who'll cut rates even where not supported by inflation and employment numbers, whereas the ECB is more disciplined and less subject to political interference.

You're the one making a big assumption: that this is a short term movement in the dollar.

Trump has made it clear he wants a cheaper dollar to make US exports more competitive and JPM is forecasting another 10% drop in the value of the dollar this year.

Just because the dollar and euro have been roughly level for over a decade doesn't mean that will remain true, currencies often go through pretty fast changes in relative values every few decades as their financial and geopolitical positions change. The pound drop around 2007~2009 is a good example of one such sudden but long term price shift.