Earlier in the year, Coindesk Research shows that the US Dollar Strength Scale (DXY) against a basket of major trading partners reflects Donald Trump’s trajectory since his first term as president.
Between September 2024 and January 2025, the DXY index rose from 100 to 110, coinciding with Trump’s reelection. This current cycle peaked at 110 in mid-January, but fell below 105 in mid-November. If DXY falls around 103, it will erase all profits since Trump’s victory in November.
Typically, DXY indexes above 100 are considered strong and tend to put pressure on risky assets. However, when the index fell below 105, Bitcoin (BTC) exceeded $88,000.
A similar pattern was observed in 2017 when DXY fell from 103 to below 90, coinciding with Bitcoin’s Bull Run that year, leading in December at $20,000.
Nevertheless, macroeconomic uncertainty persists, with concerns surrounding tariffs, inflation and US GDP growth. The economy appears to be slowing, with Friday’s employment report expected to show a continuing unemployment rate of 4.0%.
If the report becomes weaker than expected, Treasury yields could continue to decline, increasing the likelihood that the Federal Reserve could consider cutting fees at its March meeting.
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