Dollar 'Fall Is Over' Says Expert As USD Has Been 'Unchanged' For 5 Months Amid Negative Consensus

Despite a prevailing “Dollar negative” sentiment among market analysts, the U.S. Dollar Index has remained remarkably stable for the past five months, leading one prominent expert to declare, “the Dollar fall is over.” This assertion challenges the consensus view, which often overlooks periods of consolidation in favor of narrative-driven predictions.

‘The Dollar Fall Is Over’

Robin Brooks, Senior Fellow at Brookings Institution, highlighted this overlooked stability, stating, “The US Dollar has been essentially unchanged for 5 months now. This doesn’t get talked about much, as it doesn’t fit the consensus narrative, which is still very Dollar negative.”

His observation suggests a potential turning point or at least a significant pause in the currency’s depreciation, prompting a re-evaluation of its trajectory.

The US Dollar has been essentially unchanged for 5 months now. This doesn't get talked about much, as it doesn't fit the consensus narrative, which is still very Dollar negative. But – as I have been saying for a long time – the Dollar fall is over… pic.twitter.com/QzJAMGkmnI

— Robin Brooks (@robin_j_brooks) September 2, 2025

Can Dollar Strengthen After Largely Unchanged Moves?

Further supporting a strengthening dollar in the short term, Michael Kao, a portfolio manager at Canyon Capital Advisors, noted recent market movements.

“UST yields are spiking today, and the USD is spiking at the same time,” Kao observed, attributing this to an Appeals Court ruling regarding IEEPA Tariffs.

This immediate catalyst provides a glimpse into the forces that could be propping up the dollar, even if temporarily, and contributing to its recent stability.

Musings of the Day, 9/2/25:

UST yields are spiking today and the USD is spiking at the same, as I expected (see yesterday's Musing).

IMHO, the reason is because of the Appeals Court ruling AGAINST IEEPA Tariffs last Friday after market close—pretty ironic considering the… https://t.co/lm2TZapdA0 pic.twitter.com/EzYfU6OcTb

— Michael Kao (@UrbanKaoboy) September 2, 2025

See Also: Policy Push vs. Market Pull: Dollar Under Pressure As ‘Reserve Currency May Be Called Into Question’ Amid Tariff Turmoil

Worldwide De-Dollarization Makes Case For Dollar Depreciation

However, not all market participants share this optimistic view. Otavio (Tavi) Costa, a macro investor, points to a deeper, more structural shift that could challenge the dollar’s long-term dominance.

Costa revealed a significant milestone: “Foreign central banks now officially hold more gold than US Treasuries – for the first time since 1996.” He views this as “the beginning of one of the most significant global rebalancings we’ve experienced in recent history.”

This trend of de-dollarization, if it continues, suggests that while the dollar may experience periods of stability or even strength, the underlying shift away from its reserve currency status remains a potent long-term headwind.

Foreign central banks now officially hold more gold than US Treasuries — for the first time since 1996.
 
Let that sink in.
 
If you think this buying streak is ending, just look at what happened in the 1970s.
 
This is likely the beginning of one of the most significant global… pic.twitter.com/raSaQJqYu2

— Otavio (Tavi) Costa (@TaviCosta) August 28, 2025

Price Action

The contrasting perspectives underscore a key debate in financial markets: whether short-to-medium term price action, influenced by specific events and technical levels, can truly override deeply entrenched, long-term structural trends impacting a global reserve currency.

The U.S. Dollar Index spot was 0.08% lower at the 98.3230 level. The dollar has declined by 9.39% on a year-to-date basis.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Wednesday. The SPY was up 0.52% at $643.57, while the QQQ advanced 0.75% to $569.87, according to Benzinga Pro data.

Read Next:

• Central Banks Worldwide Hold More Gold Than US Treasuries For 1st Time In Nearly 30 Years: ‘Significant Global Rebalancings’ On Cards Says Analyst

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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