Recently, while watching the trend of the US dollar, a question kept circling in my mind: Will the dollar rise again?

Honestly, this question is much more complicated than it appears on the surface. In Q1 of this year, non-farm payroll data remained strong, and inflation didn’t come down as quickly as expected, so market expectations for the Federal Reserve have been adjusting. From previously expecting rapid easing, now the pace has shifted to “slow, late, and small” rate cuts, and some even believe that interest rates might not move at all throughout 2026. The real policy shift might not be clear until 2027.

But here’s a key point— the Fed’s current hawkish stance is actually driven by data, not a new cycle of rate hikes. As long as employment, wages, and core inflation start to loosen, policy space will still open up.

From the exchange rate perspective, whether the dollar will rise again isn’t a straightforward answer. The US dollar index has been fluctuating between 90 and 100 for nearly a year. After dropping from the high of 114 in 2022, it has fallen about 15%. Recently, geopolitical risks have increased, and some safe-haven buying has come in, but overall, it remains range-bound.

My judgment is that the more likely trend for the dollar over the next year is high-level volatility and a generally weaker correction, rather than a one-way upward move. But that doesn’t mean it will keep falling, because as long as new financial risks or market panic emerge globally, capital will still flow back into the dollar, the safest harbor.

Additionally, it’s important to note that the dollar’s strength isn’t only dependent on the US itself but also on policies of major economies like Europe and Japan. If Europe delays rate cuts further, and Japan continues easing, the dollar could remain resilient due to relative interest rate differentials.

In the long term, the de-dollarization trend is real, but it’s a slow process measured in years. Central banks are indeed reducing holdings of US Treasuries and increasing gold reserves, but in the short term, the dollar’s core status in the global reserve system remains unchanged.

For investors, instead of passively waiting for the dollar to rise again, it’s better to take proactive action. In the short term, focus on data releases like CPI, non-farm payrolls, and FOMC meetings to catch swing opportunities. For medium to long-term strategies, using gold, forex, and other assets to diversify dollar risk can help balance the overall portfolio when the dollar is high or weakening.

In simple terms, whether the dollar will rise again depends on your time horizon. It’s unlikely to skyrocket in the short term, but it also won’t suddenly collapse. Instead, during its range-bound oscillations at high levels, it will create multiple trading opportunities.