In periods of risk aversion, the dollar has been drawing capital flows for safety, with elevated yields adding further attraction for global investors — making it one of the strongest-performing major currencies in recent sessions. However, there are signs the rally has limits. Any indication of easing geopolitical tensions or stabilisation in oil prices has triggered short-term dollar weakness, suggesting positioning is becoming crowded and vulnerable to shifts in sentiment. Fed Chair Powell’s term expires in May, with nominee Kevin Warsh expected to take over — and markets are pricing in that any rate cut is more likely in the second half of the year, after the leadership transition. Wednesday’s ADP report and ISM manufacturing PMI will be the first meaningful US data tests of the week.
USD: Safe haven — but with a ceiling
Charles Purdy
on March 30th, 2026 
