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In a Risky World, the Road to Safety Leads to the U.S. Dollar

  • Fed’s hawkish pivot sparked the U.S. currency’s recent rally
  • FX safety trades are making a comeback, leading G-10 peers
Russia Builds Ruble Defense After Crude Rout
Photographer: Andrey Rudakov/Bloomberg

The need for safety in an increasingly risky world has investors betting that the dollar’s blistering rally has further to run.

The Bloomberg Dollar Index is holding near the 2021 peak it reached in March. It rallied 2.3% in June, its biggest monthly gain since March 2020, when the pandemic panic first shook risk assets, outperforming the British pound and euro, as well as traditional haven currencies the Japanese yen and Swiss franc.