By Wei Hongxu
Since November this year, the U.S. Dollar Index has continued the upward trajectory it began after the Federal Reserve’s rate cuts, briefly breaking above the 100 mark in early November and still holding above 99. This effectively reverses the weakening trend that had persisted since April.
At the same time, dollar volatility has fallen back to levels seen before the U.S. presidential election, and the ICE MOVE Index, which measures Treasury market volatility, has dropped to a four-year low. These developments have led markets to believe that the foreign-exchange market has moved past the sharp turbulence triggered by the “Trump shock” earlier this year. Although markets are increasingly “immune” to a range of policy measures promoted by Trump, such as the reciprocal tariffs, this shift signals that the U.S. dollar is returning to its traditional…
