UUP - Dollar Decline: Stock Market Rally Explains 70% Of Recent US Dollar Downtrend Says BofA | Benzinga
Since hitting an 11-month high in early October, the US dollar index (DXY) has fallen 3.8% and this has been largely due to investors backing the recent equity market rally, analysts at Bank of America said on Tuesday.
The dollar has long been regarded as a safe-haven asset. Keeping investments tied up in dollar assets during times of market upheaval has been among the classic “risk-off” trades, along with gold.
And the reverse is also true, as BofA analyst Adarsh Sinha indicated — saying most of the dollar sell-off has been down to the equity market rally, which saw the S&P 500 index climb 10.5% since Oct. 27 as investors have become more bullish on risk.
Also Read: Investors Ditch US Dollar At The Fastest Pace In A Year
Market Performance Indicates Higher Risk Appetite
The equity market rally has been driven by double-digit percentage gains in the shares ...