Watch the interview of Jeremy Stretch of CIBC and Miswin Mahesh of Barclays with Manisha Gupta on CNBC-TV18 where they spoke about the impact of Brexit on the commodity and currency markets.
The weakening pound is going to mean a cheaper euro. And, if euro cheapens, the dollar is going to get stronger. The dollar will mainly benefit from safe haven flows into the currency, says Jeremy Stretch.
"Most of the traders in the market are probably trading from the short side, so when we see a little bit of buying, we often think that we'll see a little bit of a short-covering rally," said Ben Le Brun, a market analyst at OptionsXpress.
The dollar index, a measure of the dollar's value against currencies of the United States' major trading partners, last week hit its highest level in almost three years at 84.50. It held near that peak on Wednesday, a day after strong US data lifted the blue-chip Dow Jones Industrial Average to a record high.