Dollar May Increase Profits Due to Stock Market Volatility

This opinion was expressed by an analyst at MUFG Bank


The dollar may continue to rally as concerns over sharp fluctuations in stock prices will boost demand for safe assets, which could prompt short-sellers to liquidate rates against the US currency, MUFG Bank reported.

“The US dollar is strengthening again today, and with dollar short positions currently significant, more explicit short liquidation is highly possible,” says MUFG's Derek Halfpenny.

Stocks have taken off sharply in recent days, fuelled by struggles between US retail investors and hedge funds for short stocks. The dollar index rose 0.1% to 90.5770.

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