This ISN'T the end of Bearish EUEUR/USDOANDA:EURUSDlewulbThe dollar still has every reason to remain strong going into the end of the year. Fundamentally, nothing in the macro picture has changed enough to justify a structural shift. If anything, the underlying conditions that supported the dollar through the first three quarters of 2025 are still in place, and some of them have actually strengthened. US growth continues to outperform. The latest GDP revision came in at 3.8 percent annualised for Q2, while unemployment sits comfortably around 4.2 percent. Inflation has eased, but not nearly enough to let the Fed relax. Core PCE is still printing close to 2.9 percent year-on-year, with monthly readings holding around 0.3 percent. That’s not the kind of data that gets you back to a 2 percent target anytime soon. It leaves the Fed with limited room to cut. Markets that were pricing over 75 basis points of easing earlier this year have now pulled that back to under 40. The message is simple; Inflation is sticky, the economy is firm, and monetary policy will stay tighter for longer. That’s what keeps the dollar bid. The US still offers the best yield profile among developed economies. The US02 trades around 3.5 percent, while the German equivalent is roughly 2.6 percent. That 90 basis point spread doesn’t sound dramatic, but in a world starved of yield it’s enough to keep capital anchored in USD assets. The ECB can talk tough, but its own economy doesn’t give it much backing. Growth in Europe is soft, industrial output is stagnating, and political fragility (most recently in France) is adding another layer of uncertainty. It’s hard to be bullish the euro in that kind of environment. Money supply also tells a story. M2 has started expanding again, up about 5 percent year on year to just over 22 trillion dollars. Velocity is still low, but the pickup in liquidity makes it difficult for the Fed to pivot dovish. Rising liquidity without falling inflation just keeps the central bank on guard. That, again, supports the dollar because it remains both high yielding and highly liquid compared to its peers. Then there’s the geopolitical layer. Trump’s comments on potentially reintroducing broad tariffs on China have reignited trade war fears. We’ve seen this movie before. Back in 2018 and 2019, similar rhetoric was enough to drag global manufacturing into contraction and push EURUSD nearly ten percent lower. Even if no policy is implemented yet, markets price probabilities, not promises. The risk alone is enough to push capital toward safety, and that safety, historically, is the dollar. Europe isn’t helping its own case either. Macron’s reappointment of Sébastien Lecornu as Prime Minister is meant to stabilise French politics, but the deeper issue is fragmentation and fiscal strain. Investors see that and start demanding more risk premium for holding euros. It adds another layer of pressure on an already weak macro foundation. Seasonality also plays a part. Historically, the dollar tends to strengthen into the final quarter of the year, particularly against the euro. Year end hedging and repatriation flows usually add to the bid. It’s not the driving factor, but it aligns with the rest of the macro picture. Positioning data shows that large speculators haven’t fully covered their short euro exposure either, so the positioning still leans toward more dollar strength if data stays consistent. The long end of the yield curve is telling the same story. US10Y remain around 4 percent, reflecting both inflation risk and the fiscal premium that’s built into US debt. The curve is still inverted, but that inversion isn’t signalling imminent recession which showing that markets accept higher real rates for longer. That keeps US assets attractive, even with short-term volatility. Volatility itself feeds the trade. Episodes of tariff threats, European politics, or geopolitical noise in Asia tend to push investors toward the dollar. Every spike in the VIX ends up reinforcing the USD’s safe haven role. Until we get a synchronised global recovery or a real shift in inflation behaviour, the dollar remains the world’s anchor asset. There are counterarguments of course. The ECB could surprise with stronger growth or firmer inflation, which might compress yield spreads for a time. US data could soften temporarily. But these are tactical pullbacks, not structural breaks. The broader landscape still favours the dollar. When you strip away the noise, the story hasn’t changed. The US offers the highest real yields, its economy is holding up better than its peers, and global uncertainty keeps liquidity rotating into USD. Europe and Japan simply don’t have the policy flexibility or growth trajectory to attract sustained inflows. Until those dynamics shift, the dollar’s dominance holds. In short, the dollar remains in a buy the dip environment. The fundamentals, the flows, and the sentiment all point in the same direction. Every data print or political headline might cause short-term fluctuations, but the underlying structure still supports a strong dollar going into yea end.