The US dollar resumed its recent downward trend in the week ending August 28, 2020, as American blue-chip stock indices posted a straight run of five positive daily returns, reaching yet more record highs. This negative interaction extends the pattern of opposing share-price and exchange-rate movements, which has been dominant since the beginning of March. The British pound was one of the biggest beneficiaries of the ongoing dollar weakness, gaining 2% on its American rival and reaching its highest level since December last year. However, the strengthening exchange rate weighed on large UK companies, as many saw their share prices decline—in contrast to their North American and Continental European counterparts.
Please refer to Figure 6 of the current Multi-Asset Class Risk Monitor (dated August 28, 2020) for further details.