Mumbai, July 9 -- While dollar-denominated US risky asset valuations have mostly recovered since early April, the value of the US dollar remains weaker, according to Bank of England's financial stability report. At the time of the FPC's June policy meeting, the US dollar exchange rate index was 5% below its early April level and 8% down since the November FSR, at close to a three-year low.

Since late February 2025, there has been a notable change in the usual correlation patterns between the dollar and other US assets, including equities and government bond yields, the report noted. Historically, when risky asset prices are falling during times of global stress, or when US Treasury yields are rising, the dollar has tended to strengthen. ...