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Back in January 2025, Adam Turnquist built a chart. LPL Financial\u2019s chief technical strategist had overlaid the U.S. Dollar Index\u2019s trajectory across Donald Trump\u2019s two presidential terms \u2014 a simple comparison, he figured, to see how the second was shaping up against the first. He\u2019s been updating it every couple of months since, sharing it with his head of macro research each time with the same running joke: why do we even try to predict?<\/p>\n
\u201cIt\u2019s the exact same pattern,\u201d he told Fortune<\/em>. \u201cLast week, I started refreshing data, and here it is.\u201d<\/p>\n The pattern matters now because of where it says the dollar is. After a 13% decline over 269 trading days from its January 2025 peak, the Dollar Index has broken out above resistance near the 100 level \u2014 the same stage-three move that followed the Trump first-term bottom in early 2018. If that playbook holds, Turnquist thinks the dollar may be entering another sustained climb.<\/p>\n The symmetry in the chart is almost uncomfortable to look at. \u201cThe dollar has tracked so closely, not only in the magnitude but the duration of the moves,\u201d he said. After Trump\u2019s 2016 victory, the Dollar Index rallied roughly 8% into a January 2017 peak, then reversed hard \u2014 falling about 15% over 293 trading days before bottoming in early 2018. From there, it staged a 17% climb into a 2020 high, a run that ended only when the pandemic arrived.<\/p>\n The 2024 election replay: a rally into a January 2025 peak, a 13% decline over 269 trading days, a bottom in early 2026. The percentages are close. The trading-day counts are close. The shape is close enough that Turnquist keeps making the same joke.<\/p>\n He\u2019s also the first to say it doesn\u2019t quite make sense. The macro backdrops look nothing alike. The 2016 reflation trade ran on an accommodative Federal Reserve and inflation running well below target \u2014 conditions with no analog in the current cycle, where the Fed is still wrestling with an inflation rate that refuses to return to 2%. The only macro overlap Turnquist can find is elevated oil prices. Everything else has changed.<\/p>\n So if the conditions are different, what\u2019s running the same script?<\/p>\n One possibility Turnquist considered: Trump wanted it that way. He ruled it out quickly. \u201cWe haven\u2019t heard him talk about the dollar lately,\u201d he said. The better explanation is structural. \u201cInitial excitement of Trump\u2019s policies being implemented, the big reflation trade in 2016, then reality sets in \u2014 it takes a while for policy to set in with growth, the trade fizzled out a little bit, then rebounds in a pretty material way,\u201d he said. Both terms followed that arc. Interest rates played a role in both as well, Turnquist acknowledged \u2014 \u201cpart of it is where interest rates are\u201d \u2014 but the dominant force, in his reading, was growth expectations, not yield differentials.<\/p>\n His answer has two layers. The first is policy sentiment. \u201cTaking politics out of it,\u201d he said, \u201cthe policy initiatives are clearly pro-growth \u2014 lower taxes, more incentives for corporate America, incentives for companies to invest and bring back manufacturing. All of those factors are catalysts for growth, especially with all the curveballs we\u2019ve faced.\u201d In both terms, the election triggered the same initial bet on American reflation, which produced the same initial rally \u2014 and in both terms, that bet met the same friction of reality, which produced the reversal.<\/p>\n But beneath the policy layer, he sees something more durable: the dollar as a barometer of relative economic strength. Before the Covid pandemic arrived on American shores in 2020, after all, the U.S. economy had surprised throughout Trump\u2019s term with decent job growth, low interest rates and a strong stock market. \u201cWhen the U.S. economy is outperforming other economies, the dollar tends to strengthen,\u201d he said. \u201cIn a simple way, that\u2019s what this chart is \u2014 a testament to the U.S. economy.\u201d<\/p>\n That dynamic is more pronounced this cycle because of where the outperformance is concentrated. Foreign investors who want exposure to the AI trade \u2014 to the hyperscalers, the semiconductor names \u2014 have to sell their local currency to buy dollar-denominated assets. That steady flow of conversions amounts to a structural bid for the dollar, one that has little to do with the White House and everything to do with where the technology revolution is headquartered. \u201cYou look at the AI trade, you look at the tech names and you want to own that,\u201d Turnquist said. \u201cYou sell your local currency to go fund dollar purchases of one of the hyperscalers or one of the semiconductor companies.\u201d<\/p>\n The Trump-era symmetry looks even more striking set against the dollar\u2019s path under Joe Biden, which followed a completely different shape. The Dollar Index started Biden\u2019s term near 90 in January 2021 \u2014 after dipping to its lowest level since 2018 \u2014 and had climbed to roughly 108 by the time he left office in January 2025, a gain of well over 15%, one of the stronger full-term performances for the currency in decades. But the drivers were nothing like the Trump-era pattern: the dollar surged as the Fed launched an aggressive hiking cycle to fight the biggest inflation surge in 40 years, pushing the index above 110 by 2022.<\/p>\n That contrast cuts to the heart of the \u201cwhy\u201d question. Biden\u2019s dollar story was fundamentally a Fed-and-inflation story \u2014 rate differentials doing the work. Trump\u2019s two terms, by contrast, show a distinct election-cycle shape: an initial sentiment-driven rally, a reversal as reflation hopes fade and reality sets in, then a rebound tied to actual economic outperformance. It\u2019s the difference between a currency moved by monetary policy versus one moved by shifting bets on relative growth and American exceptionalism. <\/p>\n Some critics have pointed to a roughly 16% decline in the dollar\u2019s purchasing power under Biden amid high inflation \u2014 a different metric than the index\u2019s point gains, but a reminder that a strengthening DXY and a weakening consumer dollar can coexist. To be sure, purchasing power has eroded again under Trump\u2019s second term, though more modestly, as the inflation rate simply refuses to return to the Fed\u2019s 2% target, and some watchers think it will shoot up to 4%.<\/p>\n Turnquist has little patience for the reserve-currency displacement narrative that surfaces every time the dollar sells off. The scenario requires not just a competing currency but a Treasury-scale liquid market \u2014 something he doesn\u2019t see forming. \u201cIt\u2019s not like you can go trade in yuan or the euro or crypto or whatever.\u201d China, he noted, has tried repeatedly to promote yuan-based settlement and hasn\u2019t gotten far. \u201cThey\u2019ve tried and tried and tried, and you can\u2019t trade in yuan.\u201d Roughly 90% of foreign-exchange transactions involve the dollar; the alternatives \u2014 gold, Treasuries, the euro \u2014 trail far behind.<\/p>\n The nuance he draws is between diversification and abandonment. \u201cThere\u2019s been a diversification away from the dollar, and that\u2019s what central banks have done,\u201d he said. \u201cBut there hasn\u2019t been a boycott in any material way that suggests it\u2019s the end of the dollar.\u201d The figures bear him out: roughly 90% of foreign-exchange transactions involve the dollar, with gold, Treasuries, and the euro trailing far behind as alternatives.<\/p>\n Any real reserve-status shift, he argues, would require both a competing currency and a Treasury-scale liquid market \u2014 conditions he doesn\u2019t see forming anytime soon. \u201cMaybe in my lifetime\u201d we will see the dollar displaced as international reserve currency, he said, rummaging through his office for a book about the history of currencies.<\/p>\n \u201cAt some point it will happen,\u201d he acknowledged, noting that different regimes have cycled through, \u201cprobably for thousands of years.\u201d Noting the ever-mounting problem of the $39 trillion-plus national debt, he added, \u201cyou look at our fiscal responsibility \u2014\u00a0if you can use that word \u2014\u00a0the deficit, if that continues, then, yeah, at some point people will be worried about owning the dollar, owning Treasuries,\u201d but a lot of things would have to happen to displace the dollar. \u201cCertainly not this year or next year,\u201d he added.<\/p>\n Perhaps the most telling wrinkle in Turnquist\u2019s analysis comes from consumer sentiment data. Conference Board confidence figures have shown a sharply polarized gap through 2026 \u2014 Republicans reporting a healthy economy, Democrats reporting a terrible one, with the divide at extremes he hasn\u2019t seen before. \u201cThere\u2019s always a divide,\u201d he says, \u201cbut it\u2019s at extremes right now.\u201d<\/p>\n And yet, when you look past the survey responses at what people are actually doing, the story changes. \u201cActions speak louder than words,\u201d Turnquist said. Spending data shows consumers and companies continuing to invest and buy despite the political chasm in how the economy is perceived.<\/p>\n That gap between rhetoric and reality may be another story behind the chart: a currency market that, for all the noise around tariffs, Fed independence fights, and reserve-currency doom-saying, keeps tracking the same fundamental signal it always has \u2014 where capital believes growth is strongest. Turnquist was surprised it stuck to the script this closely. <\/p>\n \u201cWhat it boils down to this time and probably the previous episode,\u201d Turnquist said, \u201cis the dollar is the gauge of relative economic strength.\u201d The chart, for now, is still following the script of \u201cthe American exceptionalism theme.\u201d<\/p>\n<\/div>\n #Trumps #dollar #d\u00e9j\u00e0 #uncanny #chart #greenback #shows #American #exceptionalism<\/p>\n","protected":false},"excerpt":{"rendered":" Back in January 2025, Adam Tur… <\/p>\n","protected":false},"author":1,"featured_media":1186,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[1207,2236,2232,2234,2233,2238,2237,1595,277,2235],"class_list":["post-1185","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-american","tag-chart","tag-currency","tag-deja","tag-dollar","tag-exceptionalism","tag-greenback","tag-shows","tag-trumps","tag-uncanny"],"yoast_head":"\nTwo terms, one script<\/h2>\n
The Biden counterfactual<\/h2>\n
How long will the dollar stay strong?<\/h2>\n
A country divided, but still spending<\/h2>\n