It wasn’t just the Greenback that was targeted last year – currency debasement hit all majors, as seen in Gold’s performance against the OECD FX Basket.
So is the Dollar still in danger? Yes.
Policy directives from the Trump Administration can be unpredictable for nations and investors – Look at Canada PM Mark Carney turning to China for a Trade Deal in the absence of such from the US.
And of course, the Fed’s Independence at stake keeps hurting the Buck’s prospects, notably fueling rallies in metals since August, but hasn’t shown much change since, even with the latest Powell Investigation from the DOJ.
But as long as commodities are still priced in US Dollars, Banks and firms still require Dollar funding, and the US Treasury is still the most liquid, safe-haven asset available, the Dollar can’t just disappear from the system – leading to the current market conditions.
Finally, with the recent interventions in Venezuela, threats to Iran, the dollar saw demand from Freedom Trade flows.
On the other hand, some technical signals could point to a short-term correction in the USD demand.
We will look at the Dollar Index and EUR/USD to assess the current state of the Market and whether more upside is warranted for the Dollar after its strong, surprising start to 2026.
