US dollar to best in 2023 and 2024 So far, 2025 is largely the same as the US dollar soared at the start of the year. It rose more than 1% against the euro and the pound and outperformed every other major currency.

In terms of economic news, there wasn’t much today other than a skewed but solid initial jobless claims report and soft data on construction spending and manufacturing sentiment. These are not market movers and Treasury yields are only marginally higher.

So what gives?

It’s all about capital flows. The US economy is strong, but that is well known and is not the main driver. These are capital flows. Network effects around US assets are growing as US capital markets significantly outperform. We are at the point where large investments are almost exclusively happening in US dollars and in US markets. Additionally, dollar derivatives dominate and spreads are far narrower in an over-leveraged world.

I think there’s a big opportunity when the tide turns. The world’s best-performing capital market last year was Argentina after President Milei chainsawed the bureaucratic state. There are other countries that will follow this path and could achieve similar results, at least initially.

The short answer is that right now America and American companies are not only winning, but thriving. The risk is that tariffs or fiscal hawks could destroy the party, but for now the market is not afraid of a Republican Congress.

This now-classic shot by Ross Gerber illustrates the sentiment.