Greenback has stopped insulating U.S. stocks

Seemingly erratic U.S. policymaking may be weakening the dollar as much as any potential 'Mar-a-Lago accord' could have hoped, but risks taking U.S. asset prices down with it. As U.S. trade and political alliances are sundered and Americans start to fret about an economic downturn, foreign investors in the United States are having to rethink some basic assumptions. Deutsche Bank strategist George Saravelos points out that in early 2025, overseas investors, who have for years been happy to hold U.S. dollar assets without hedging the currency, have had a rude awakening. Even though first-quarter losses for S&P 500 stocks are…