The U.S. dollar and currency-related exchange traded funds have outperformed in 2022 as global investors turned to the relative safety of the greenback in a troubling year.
The Invesco DB US Dollar Bullish (UUP) increased 9.1% year-to-date.
U.S. capital flow data revealed the foreign cash hoard of dollars is close to record levels as global investors cut exposure to risky assets and piled into the world’s reserve currency, the Wall Street Journal reports.
“The dollar has assumed the role of the global stagflation hedge with dollar cash being one of the few financial assets offering returns,” Deutsche Bank currency strategist George Saravelos said in a note to clients, referring to the phenomenon that occurs when slow growth combines with rising inflation.
The WSJ Dollar Index, which tracks the U.S. dollar’s move against a basket of 16 currencies, gained 3% so far this month and was up about 12% over the past year.
While the Swiss…
