Markets Still Refuse To Believe In King Dollar

The Dollar Disconnect

The dollar should arguably be much higher right now. US growth and labor data keep outperforming, oil should favor the USD, and Fed expectations keep repricing higher. Yet DXY has barely moved since the Iran conflict escalated.

Markets still believe the Strait of Hormuz eventually reopens. But the longer negotiations drag on, the harder it becomes to ignore US macro outperformance.