Is the US Dollar ready for a bull run?

• Inflation control among new Fed chair's priorities
  
  
• Stronger dollar could pressure metal prices
  
  

Metal Intelligence Centre: Since the start of Donald Trump's second tenure, in January 2025, the US Dollar Index has weakened under the weight of policy uncertainties and the negative impact of tariffs on the economy. The USD Index fell 12.7% in the first half of 2025.

For nearly a year, the US economy outperformed forecasts, equity indices reached new record highs, the manufacturing sector revived, and job additions surpassed expectations.

Traditionally, these should help the dollar to recover. Yet, since July 2025, the US Dollar Index has traded sideways near its 2025 lows. This wasnt without reason.

Inflation control could support US dollar

For five consecutive years, US inflation exceeded the Federal Reserve's target of 2%. This marks the longest period of overshoot in four decades. While wars and supply chain disruptions can explain short-lived spikes, a prolonged elevation signals that monetary policy was too loose. This was one of the key reasons why the dollar failed to rally.

This is set to change under the new Chairman of the US central bank.

Kevin Warsh, the new Chair, has made it clear that restoring price stability is the central priority.In market terms, this signals two things: higher-for-longer interest rates and a gradual tightening of dollar liquidity. Both are structurally supportive of the dollar and also the missing piece of the jigsaw puzzle for a multi-year uptrend in the US dollar.

Technical indicators suggest potential breakout

From a technical perspective, the story aligns well with the macro narrative.

The Dollar Index remains within a long-term rising channel, suggesting the broader bull structure is intact despite recent consolidation.

The 100.5 level stands out as the key pivot. A sustained move above this zone would likely flip positioning, attract momentum flows, and mark the beginning of a new dollar bull phase.

If history repeats, the dollar's rally could gain momentum in the coming months, and the uptrend may last for a couple of years.

Generally, a rising dollar is punishing for metal prices. A stronger dollar typically raises the cost of dollar-denominated commodities for non-US buyers, often weighing on demand and prices.

Note: This article has been published as part of a content partnership between MIC and BigMint.