Forex analytics. The dollar catches the signals – ForexNews.PRO
We should pay less attention when people loudly tell us what we want to hear. And pay more attention to what they are doing. The markets consider Kevin Warsh to be the most hawkish of all Donald Trump’s candidates. It doesn’t matter what words he used to convince the president. The main thing is what the former FOMC official will do. This approach, coupled with the growth of business activity in the US manufacturing sector to its maximum since 2022 and a partial shutdown, allowed the “bears” on the EURUSD to develop an attack.
Despite the significant weakening of the US dollar in 2025-2026, its trade-weighted index continues to be at historically high levels. Since the 1970s, he has painted the peaks three times. The collapse of the first of them occurred in 1985 after the agreement of the United States with other countries in the Plaza Accord. Back then, the White House said a lot that a strong currency reduces the competitiveness of American companies.
The second sharp sell-off occurred after the dot-com crisis at the beginning of the 21st century and was caused both by the bursting of the Internet bubble and the related “sell America” strategy.
History repeats itself. Unsurprisingly, investors are starting to get rid of the US dollar when the first signs of a repeat of those two sales appear. Whether it’s rumors of a coordinated intervention by Washington and Tokyo to bring down the USDJPY or the launch of sales of all American goods due to Donald Trump’s tariffs.
Indeed, non-residents own so many assets issued in the United States that a split within the West or investors fleeing from Big Technology could seriously harm American stocks and the dollar.
However, the opposite is also true: if the signals are received but not processed, the markets return to the greenback. As soon as US Treasury Secretary Scott Bessent stated that the United States did not participate in currency interventions to strengthen the yen, the EURUSD collapsed from its January peak. As soon as Donald Trump chose Kevin Warsh, the “sell America” process stalled, and the main currency pair accelerated its decline.
The US dollar is supported by both strong macro statistics and a partial shutdown. He is forcing the BLS to delay the publication of US employment data. And without it, the Fed is like without hands. Until there are figures, it is difficult to guess what exactly is happening with the labor market and make a decision on rates. The pause in the monetary expansion cycle is dragging on, which allows the greenback to feel like a fish in water.
