Frank Curzio
Founder & CEO of Curzio Research, Wall Street Unplugged Host
The dollar should strengthen as Trump goes on offense at the NATO summit, threatening Spain with trade penalties and demanding US control of Greenland. Such moves typically lift the dollar, hitting dollar-priced commodities and emerging markets. Allies will not fold publicly, but US trade threats tend to work behind closed doors. x.com x.comÂ
The Fed's proposal to make dollar swap lines permanent would make the US the permanent backstop of the global financial system, keeping the dollar dominant. Swap lines pump dollars into foreign central banks during crises and quickly stabilized markets in 2008 and 2020; keeping them open signals that global dollar stress is structural. A Fed liquidity backstop also gives risk assets a floor, keeps gold bid and weakens the case for sitting in cash. x.com x.comÂ
The dollar should catch a monster bid before any structural weakness, because fiat is a menu of bad choices and in a deleveraging no one reaches for euros or renminbi. If the US concludes it will not win in AI, there is a high probability the next step is to tank everything, and the dollar and US bonds would then be bid; the yen could also rise as carry trades unwind. Dollar strength comes first and leads to structural dollar weakness on the other side. x.com x.comÂ
The US dollar should strengthen over the long term as the US makes other countries reliant on its oil, a strategy that is working. The US is exporting more oil than it has in a long time. The bond move reflects rising energy prices, not a weak US economy, which is not actually that bad off. x.comÂ
The dollar's longer-term prospects are very negative: 2008 showed the dollar-based system was built on quicksand, and 2026 showed the US has lost its leadership of the Western-oriented world. Both are very positive for gold. First, though, the dollar might rise on a flight to liquidity. x.com x.com x.comÂ
The US dollar is becoming a black hole for global liquidity, driven by Fed Chair Kevin Warsh's hawkish stance and a wave of AI-driven capital flowing back into US tech. Net long dollar positions have surged to $29.4 billion. BofA cut its EUR/USD target to 1.15 from 1.20 and now expects three more hikes this year, while Man Group sees another 5% dollar upside by year-end. This is an AI-monopoly story as much as a rate story, with capital leaving stagnant overseas markets to fund US computing. … Show more
France's fiscal bind and widening French-German bond spread raise contagion risk across Europe and threaten further euro weakness against the dollar. There is no easy economic way out for France, a problem that may apply to many EU countries. The 10-year spread is nearing the 190-basis-point level seen during the November 2011 eurozone crisis; the euro should continue to weaken against the dollar. x.com x.comÂ
The US dollar looks set for a multi-year bear cycle because a multipolar world needs fewer dollars. Reserve managers are diversifying, trade settles in more currencies and central banks accumulate gold instead. Against an equally weighted basket, the dollar's half-century sequence of lower secular highs is topping again on its 7-to-10-year cycle. Every major commodity bull of the past century ran alongside a falling dollar, which could also bring a second inflation wave. x.comÂ
The US dollar should keep strengthening against other currencies as Brent Johnson's dollar milkshake theory plays out, with stablecoins accelerating the move. The Turkish lira's fall to an all-time low against the dollar, down 98% since 2010 per Barchart, is an example of what other currencies will see. x.comÂ
The US dollar looks more bullish than bearish because it is priced against other currencies that are hit harder by oil. Most countries' bond yields are rising, not just America's, and the US has the world's most dominant economy, which AI is accelerating relative to others. Still, trading currencies makes little sense when stocks are rising 25%+ a year. x.comÂ
The US dollar should weaken because the US government wants a weaker dollar to increase manufacturing competitiveness and relieve global stress from a strong dollar. x.comÂ
The US dollar is supported by hawkish comments from Fed Chair Kevin Warsh, which led traders to sharply increase bets on a rate hike as soon as September. The Dollar Index trades around 99.6 after a sharp rise in the previous session. x.comÂ
