Following US President Trump’s speech at the World Economic Forum (WEF) in Davos,  the USD weakened against the majority of G10 and emerging market currencies. The US Dollar Index (DXY) fell to levels of 96.00, its lowest level since 2022. The price action illustrated many similarities to the April 2025 sell-off. Both the USD and long-end US rates weakened coincidentally – showing an important correlation decline (once again). This correlation breakdown is highly important for international non-USD-based investors. Normally, the USD tends to appreciate when US asset markets decline, meaning that it plays a stabilising role in non-USD-based portfolios. However,…

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