Dollar struggles despite equity sell-off

After another volatile few days across financial markets, the US dollar looks set to end the week lower against most major currencies. Given the renewed falls in “risky” assets, that is arguably somewhat surprising: the dollar generally does well when risk sentiment worsens. The simplest explanation, as we suggested last week, is that currency markets tend to mean revert, especially following large and rapid moves. After its recent rally, the dollar was due a pause. The key question now is how long that pause lasts. ECB Drop-In (24^th May 10:00 ET/15:00 BST): Could the ECB deliver a hawkish surprise? Join economists from our Europe and Markets teams for a discussion about what to expect from the Bank’s tightening cycle, including the chances for a bumper hike in July or even an early move at next month’s meeting. Register now.