Reports of the dollar’s death in 2021 turn out to havebeen greatly exaggerated. Year-to-date the dollar index isup 4.1%, and is stronger pairwise against 87% of majorcurrencies, defying what was an unusually strong bearishconsensus at the beginning of the year. In contrast to thatconsensus, we were much more circumspect, and expectedat worst only a modestly weaker dollar as the path to globalrecovery was expected to be bumpy and in any case thedollar was entering the more consolidative middle part ofthis uniquely compressed cycle (see Global FX Strategy2021). We upgraded the dollar outlook after the Democratclean-sweep introduced the prospect of yet another phase ofUS economic exceptionalism that would leak into greaterUSD rate support, with or without FAIT (see FXMW:Georgia Throws the dollar a yield life-line, 8-Jan). Andcompleting the transition to outright dollar bulls, we flaggedthe June FOMC as a watershed that was the cue to positionfor interest rates to lift the dollar narrowly vs. reservecurrencies and potentially more broadly as well (see FOMCis a bullish watershed for USD in 2H, 18 Jun).