Looking at previous episodes of Fed monetary tightening cycles, tracking the effective federal funds rate increases and performance in the DXY index going back to the late 1980s
A brief list of what I found. On average, 5-months heading into the first increase in the EFFR, the dollar strengthened by about 1.2%. After the first rate hike, 2/6 times the dollar index posted losses right away (1999 and 2004). On average, the dollar stayed flat five months after the first rate hike, however, we see continued gains 10-months after tightening started
Going forward to 20-months after Fed's first rate hike, we see losses in the dollar index in 1993 and 2016 by 15% and 4%, respectively. The largest gains are seen in 1988 and 1999 at both 9%. If anything should be taken from this is the future discount mechanism of markets as you're more likely to spot strength in the dollar heading into the Fed than right after the start of tightening, this is in line with the broad USD performance seen for the last couple of months
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