The same logic applies to markets. After the US dollar fell last year, many investors expected more weakness in 2026. Instead, the dollar is up slightly so far this year. That shouldn’t be surprising.
Historically, whether the dollar has a negative or positive year, the odds of a stronger or weaker dollar in the subsequent year are about the same as a coin flip. Short-term streaks—on the court or in currencies—don’t tell you much about what comes next.
Exhibit 1
US Dollar vs. Select Currencies
Prior year returns vs. subsequent year returns, 1990–2025
Past performance is no guarantee of future results.
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