US dollar & equities may not always dance to the same tune

On balance we suspect the US dollar will be positively correlated with the performance of the US stock market (i.e. it will have a “positive beta”) over the next year or so. But we don’t think that the greenback’s role as a “safe haven” is over for good, and wouldn’t rule out the correlation turning negative again – with the dollar rallying and the stock market selling off – in the event of a future economic crisis.

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