Swissquote Bank analyst Ipek Ozkardeskaya said that since the global investment portfolio is highly concentrated in US companies, investors may need to increase their hedging against the risk of a weakening dollar. This is likely to further depress the dollar's valuation in the medium term. In the past, investors were in no hurry to hedge against the risk of the dollar depreciation, because when market volatility intensified, the dollar usually strengthened due to inflows of safe-haven funds. Recently, however, things are different: the US dollar continues to weaken despite rising market volatility. And this increase in volatility itself has raised hedging costs, leading to an abnormal negative correlation between the dollar and volatility. This situation is causing serious problems for investors.

Swissquote Bank analyst Ipek Ozkardeskaya said that since the global investment portfolio is highly concentrated in US companies, investors may need to increase their hedging against the risk of a weakening dollar. This is likely to further depress the dollar's valuation in the medium term. In the past, investors were in no hurry to hedge against the risk of the dollar depreciation, because when market volatility intensified, the dollar usually strengthened due to inflows of safe-haven funds. Recently, however, things are different: the US dollar continues to weaken despite rising market volatility. And this increase in volatility itself has raised hedging costs, leading to an abnormal negative correlation between the dollar and volatility. This situation is causing serious problems for investors.