The US dollar index has been steadily rebounding since the beginning of the year, breaking through the 99 level for a while now. Recently, I’ve been looking at forecasts for the dollar index’s trend and found that market opinions are quite divided on its future direction.

In the short term, non-farm payroll data has become the key factor. Analysts point out that unless the employment report exceeds expectations, the dollar’s current rally might be just a fleeting moment. The dollar is actually somewhat vulnerable right now; if the labor market weakens a bit more, it could easily be knocked down.

But the long-term outlook for the dollar index is more interesting. Optimistic institutions believe that the risks of the US economy accelerating growth are underestimated. With the AI boom and various stimulus policies, the dollar could rise further by 2026. Pessimists, on the other hand, say that divergence in Federal Reserve and other central bank policies, along with US fiscal pressures, will continue to weigh down the dollar. There are also predictions that the dollar index will rise first and then fall, possibly returning to around 95 by the end of the year.

So, the forecast for the dollar index now depends on which camp you believe. In the short term, focus on non-farm data; in the long term, look at economic fundamentals and central bank actions. That’s probably the approach most people are taking.