After months of pressure, the U.S. dollar may be staging its comeback. The DXY index is up 3% since early September, marking the first sustained rally since early 2025. What started as a short-covering bounce now looks like the early stages of a sentiment shift.

Why It’s Turning

The case for a stronger dollar is rebuilding.

• Rising U.S. productivity and steady corporate profit growth are attracting fresh capital inflows.
• Global peers look fragile — Europe’s politics are messy, Japan’s policy outlook uncertain.
• Goldman Sachs reports an “outsized increase in bullish dollar positioning,” suggesting speculative money is flipping sides.

As Standard Chartered’s Steve Englander puts it, if U.S. productivity momentum holds, it could be a precursor to renewed dollar exceptionalism — a theme markets haven’t priced in.

Why It Matters

The dollar drives everything — from commodities and EM debt to multinational earnings. A sustained rally could:

• Tighten global liquidity.
• Pressure gold and oil.
• Favor U.S.-centric equities over exporters.

KyriWealth Take

The USD is still ~9% weaker YTD, but technicals are firming. Momentum is building toward Q4 as traders hedge for stickier inflation and slower Fed cuts.

Watch:

• Long USD/JPY — momentum + policy divergence.
• Short EUR/USD — euro capped by political overhang.
• Macro exposure via UUP ETF (Dollar Index Bullish Fund).

If this quiet dollar revival accelerates, expect a fast portfolio rotation — and a test of who’s still positioned short.

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#USD #Forex