Mumbai, Sept. 19 -- The US dollar paused its depreciation after a significant step down in the second quarter of 2025, according to BIS quarterly review. While dollar depreciation has historically been a marker of risk-on phases in financial markets, the dynamics over the review period did not match historical patterns, it said. The risk-on tone was accompanied by an appreciation of the currency following the unveiling of the US fiscal package in early July.

BIS noted another unusual development in the general risk-on environment in the dynamics of the US dollar. The dollar appreciated while equity markets were posting strong gains. This appreciation is somewhat at odds with the dollar's tendency to soften in periods of heightened risk-t...