The Macro Minute with Darius Dale Should investors chase the bearish trend in the US dollar?
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Jan 27, 2026 A deep dive into the U.S. dollar’s decisive breakdown and why structural headwinds could keep it weak. Discussion of how actions to backstop the yen and global capital flows accelerated the slide. Consideration of Fed reform, treasury market imbalances, and reserve buying. A look at rapid dollar moves versus gold and links between major currency shifts and broader regime change risks.
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Dollar Breakdown Signals Durable Bear Trend
- The U.S. dollar has decisively broken down and is overvalued against peer currencies and gold.
- Structural and cyclical headwinds, including Fed reform risk and capital flows, argue for a durable dollar bear trend.
Dollar Weakness Linked To Yen Backstop And Treasuries
- Recent steep weekly losses pushed the dollar to its weakest since 2022 amid U.S. support for the yen.
- European and Japanese investors already lose money buying Treasuries and hedging dollar depreciation, exacerbating imbalances.
Position For More Dollar Downside
- Expect more dollar downside if the Fed undergoes structural reform that reduces its hawkishness.
- Position for a weaker dollar given the Fed is priced to be the most dovish major central bank over the next year.