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Analysts at BNY, led by Geoff Yu, highlight that cross-border investment exposures linked to the US Dollar have reached a phase of stabilization. Market data indicates that foreign exchange hedge ratios on Dollar holdings remain largely unchanged despite recent shifts in global macroeconomic expectations and interest rate outlooks. Simultaneously, international allocations toward US equity markets are experiencing a steady recovery as global risk sentiment improves. While corporate share buyback activity continues across major index components, BNY structural tracking shows that the direct currency impact of buyback flows on the broader US Dollar performance remains marginal compared to major macro drivers. For currency traders and institutional portfolios, the findings suggest that equity market dynamics are currently supporting overall asset flows without forcing substantial realignments in FX hedging strategy. As broader risk appetite recovers, foreign capital retention in US equities provides an underlying layer of demand for the greenback, though interest rate differentials and Fed policy expectations continue to act as the primary catalysts.
