Dollar Strengthens Amid Market Volatility and Economic Uncertainty

The U.S. dollar reached a two-week high on Thursday as fresh market volatility impacted stocks and precious metals. Traders are keenly awaiting the European Central Bank and Bank of England's rate decisions. The U.S. dollar index moved up by 0.1%, extending its gains for a second consecutive day.

Sim Moh Siong, a currency strategist at OCBC, highlights that risk aversion boosts the dollar's strength. This week's events showed the dollar recovering and stocks turning risk-off, particularly as markets evaluate corporate earnings and absorb volatility affecting gold, silver, and tech sectors.

This week saw significant selloffs in precious metals, with silver dropping by 16.6%. The Nasdaq's 2.9% decline over two days marks its most significant drop since October. These movements coincide with Alphabet's notable spending strategy and adjustments in software stocks adapting to AI advancements.