⚠️💱Dollar Relationship to The VIX Weakening: Cable FX Macro

• The traditional positive correlation (dollar up when VIX up) that held over much of the prior 5 years weakened or flipped in parts of 2025 and into early 2026. Goldman Sachs noted earlier that the dollar's appeal as a haven diminished, with correlations turning opposite (dollar weakening amid rising volatility) for much of 2025, signaling reduced safe-haven demand.

• More recently (late 2025 into 2026), correlations have trended toward more "normal" behavior again — meaning the dollar has shown some positive response to volatility spikes (e.g., brief surges in VIX and DXY together in risk-off moments like January 2026 tariff/geopolitical jitters).

• However, the dollar has lost some safe-haven status overall compared to prior years (e.g., less negative correlation with US stocks, and hedging dynamics suggest cyclical weakness persists). Broader 2026 forecasts point to continued dollar softness (cyclical decline, potentially to mid-90s lows before rebounds), even as volatility rises modestly.