Swissquote: The weakening of the dollar alongside rising volatility has become a pain point for investors

TechFlow news, on May 16, according to Jinshi Data, Swissquote analyst Ipek Ozkardeskaya said that given global portfolios are heavily concentrated in U.S. companies, investors may need to increase hedging against the risk of a weaker dollar. This could further depress dollar valuations in the medium term. In the past, investors were not eager to hedge against dollar depreciation because during periods of heightened market volatility, the dollar typically strengthened due to safe-haven inflows. But recently, the situation has been different: despite rising market volatility, the dollar has continued to weaken. This very rise in volatility has increased hedging costs, resulting in an unusual negative correlation between the dollar and volatility. This situation is now causing serious concerns for investors.