Sumary of In a risky world, the road to safety leads to the US dollar:
- The need for safety in an increasingly risky world has investors betting that the US dollar’s blistering rally has further to run.
- The Bloomberg Dollar Index is holding near the 2021 peak it reached in March.
- It is also strong against the Australian dollar, which has has slipped more than 4 per cent over the past month to be trading below 74 US cents.
- The US dollar has been labelled the “go-to safe haven” as uncertainty grips markets.
- The US dollar “looks to have more room to run to the upside,” said Michael Brown, senior market analyst at London’s Caxton FX, adding that market skittishness could increase the demand.
- Taking a longer view, the greenback is up nearly 3 per cent per cent since June 1. That’s in stark contrast to the dollar index’s average monthly decline of 0.3 per cent since the market crashed last year.
- In addition, investors increased their bets that the dollar would rise through the rally, potentially signalling that this momentum has legs.