Dollar’s Growing Reliance on Equity Inflows May Weigh on Currency

Deutsche Bank strategists say the dollar is increasingly reliant on equity inflows.

These are investments flowing into shares, including shares in the United States.

Some investors hold US assets without hedging, or protecting themselves against changes in the dollar’s value.

That approach may offer less diversification as the dollar relies more on equity investment, the strategists say.

Diversification means spreading investments across different sources of risk.

The shift could put downward pressure on the dollar over time, though the strategists describe this as a possibility, not a certainty.