{"id":25385,"date":"2025-09-26T07:30:00","date_gmt":"2025-09-26T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=25385"},"modified":"2025-09-25T13:17:11","modified_gmt":"2025-09-25T17:17:11","slug":"will-the-usd-be-the-most-surprising-rally-of-2025","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/will-the-usd-be-the-most-surprising-rally-of-2025\/","title":{"rendered":"Will the USD Be the Most Surprising Rally of 2025?"},"content":{"rendered":"

Rather than buying stocks now in anticipation of a year-end rally, buy the U.S. dollar instead.<\/p>\n

Just about no one is expecting a bounce in the buck. Indeed, almost everything I’ve read about the dollar over the past few months has been bearish.<\/p>\n

That sentiment sets up one heck of a contrarian trade.<\/p>\n

Of course, I made a similar argument back in July<\/a> when I first turned bullish on the buck. And, I doubled-down on that bullishness in August<\/a>. Yet, the buck has done nothing. The US Dollar Index (USD) was at 97.33 in July. It closed on Wednesday at 97.89.<\/p>\n

Critics will argue that 11 weeks of “go-nowhere” action proves my bullish argument is wrong. I’ll argue that 11 weeks of going nowhere when most of the financial media was calling for “the death of the dollar” is a sign that the selling pressure is exhausted.<\/p>\n

And, in this condition it only takes a small amount of buying pressure to spark a rally.<\/p>\n

We’re starting to see that buying pressure kick in right now.<\/p>\n

Take a look at this chart of the US Dollar Index…<\/p>\n\n

\"\"<\/figure>\n\n

The blue arrows on the chart point to when the Fed lowered the Fed Funds interest rate target in September 2024, and when it lowered rates again two weeks ago.<\/p>\n

Prior to both of these interest rate cutting cycles, the widespread belief was that lower short-term rates would lead to lower long-term rates. That belief put selling pressure on the dollar ahead of the rate cuts – since currencies fluctuate based on the expectations of long-term interest rate direction.<\/p>\n

Last year, though, as soon as the Fed cut its Fed Funds rate, long-term rates started to rise. And, the dollar started to rally.<\/p>\n

That rally continued all the way through the end of the year – despite the Fed cutting rates two more times.<\/p>\n

Now, look at the setup in the buck right now…<\/p>\n

As soon as the Fed cut short-term interest rates two weeks ago, longer-term rates started to rise.<\/p>\n

And, the dollar started to rally.<\/p>\n

Investors expect the Fed to cut short-term rates two more times between now and the end of the year. If long-term rates rise just as they did last year, then the dollar should rally as the market prices in the expectations for higher long-term rates.<\/p>\n

So, it’s quite possible the most surprising rally to come in the fourth quarter of 2025 will be in the US dollar.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
\nEditor, Market Minute<\/em><\/p>\n\n

\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just go here<\/a> to check it out.<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

Rather than buying stocks now in anticipation of a year-end rally, buy the U.S. dollar instead.<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-25385","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/25385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=25385"}],"version-history":[{"count":1,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/25385\/revisions"}],"predecessor-version":[{"id":25391,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/25385\/revisions\/25391"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=25385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=25385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=25385"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=25385"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=25385"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=25385"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=25385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}