USD Index Holds Firm: What It Means for Global Markets

The USD index maintained its resilience, closing the first half of 2024 at 101.2 with a +3% gain, and continued its strong performance in the first week of the second half. This reinforced USD's dominance against the EUR and JPY.

Impact on Asian Markets

■China's SHCOMP rose +1.2% as the strong USD performance boosted investor sentiment.

■Japan's Nikkei 225 saw yen strengthen as the dollar's rise supported the currency.

■India's Nifty 50 interpreted the dollar's rise as a protective mechanism against the weakening rupee.

Dividend Champions and Buybacks

■The USD's strength favored dividend yield champions, with Apple and Microsoft accelerating their buyback programs.

■Tesla increased Model Y production in response to the USD's appreciation.

The USD index's resilience has driven risk-on strategies among long-term investors, boosting interest in dividend payouts and stock buybacks. The dollar's dominance against the EUR and JPY continues to elevate market risk tolerance.