The US dollar is having a comeback story. After stumbling through its worst opening months in two decades, the greenback has regained its footing as investors rush back into the so-called “US exceptionalism trade,” a bet that America’s economic engine simply runs hotter than everyone else’s.
Speculators in futures markets have flipped from bearish positioning to net long on the dollar as of May 2026. That’s a significant pivot, and it’s pulling capital into US equities, bonds, and dollar-denominated assets.
From skepticism to swagger
The dollar suffered its weakest start to a year in roughly 20 years, dragged down by tariff anxieties, fiscal policy concerns, and a growing sense that alternative markets were catching up. Then the mood shifted. Advancements in artificial intelligence gave US tech a fresh tailwind. Comparative growth metrics started favoring the American economy again. And one by one, the bears started covering their positions.
Foreign investors now own nearly 20% of US equities, a dramatic climb from just 7% at the start of the century.
