Can the Dollar Maintain Momentum? | Presented by CME Group

Summary

The US dollar has rallied sharply in 2026 after a 9% decline in 2025, driven by higher Treasury yields, persistent inflation, and geopolitical factors including the Iran war. The narrator suggests the dollar's rally will continue as long as the Iran conflict and elevated inflation persist.

• Dollar index rose from approximately 95.5 to 98.5 in 2026.
• Rebound follows steep decline of over 9% in 2025.
• Drivers include narrowing interest rate gaps, fiscal worries, trade war, Fed independence concerns, and the Iran war.
• Higher US Treasury yields and expectations of Fed rate hikes support the dollar.
• Hotter-than-expected CPI and PPI data boosted the dollar this week.
• Dollar headed for strongest weekly performance since start of Iran war.
• Outlook conditioned on continuation of Iran war and elevated inflation.