The U.S. dollar has mirrored the swings within the inventory market because the March selloff. Trying forward, the outlook could also be as murky for the foreign money as it’s for the S&P 500 index.
On the peak of the March selloff, the greenback strengthened to its highest degree in three years, whereas the S&P 500 dropped to its lowest since December 2016. Since then, as lockdowns meant to stymie the unfold of coronavirus eased, shares have rallied and the greenback has weakened.
That has left the ICE U.S. Greenback Index, which measures the foreign money in opposition to a basket of others, up a staid 1.3% this 12 months following a rocky March that noticed the gauge swing throughout a spread of over eight proportion factors.
The greenback sometimes strengthens when worldwide buyers search protected belongings, and is prone to stay a proxy for gauging world danger urge for food by way of this 12 months, foreign-exchange strategists stated.