The Dollar: No Longer a Safe Haven, What Comes Next

The Once-Reserve Currency in a Reordering Global Order

There is a scene that repeated itself in global markets for half a century: volatility spikes, equities sell off, and the dollar quietly climbs. The VIX rising alongside the DXY was as close to a law of physics as macro investing permitted. It was the dollar’s implicit contract with the world - shelter in exchange for dollar primacy.

That contract was tested and found conditional in April 2025, when the Trump administration announced sweeping tariffs on “Liberation Day” and the dollar fell alongside - not inverse to - the fear index. A 10.8% decline in the first half of 2025 alone: the steepest first-half drop since the U.S. left the gold standard in 1973. The co-movement between DXY and VIX turned negative for the first time in the modern era.

Today, as of early April 2026, the DXY trades near 98. That calm surface conceals an unstable equilibrium. One force - the Hormuz war premium - is temporarily patching the dollar. The patch will eventually come off. The structural forces will not reverse as easily.