Why the Trade-Weighted Dollar Is Rising Despite a Weakening Economy

Lucas and Luna dig into a puzzle that's vexing global macro investors in mid-2026: the trade-weighted US dollar index is at 120.5, up from 120.33 last week, even as the US trade deficit widens to a record $77.6 billion. They trace the mechanics through the yen carry trade unwind, rising import prices from China hitting 2008 highs, and the ECB's rate rethink amid Hormuz tensions. Lucas explains how a stronger dollar is actually a symptom of weakness elsewhere—not US strength—and why emerging market ETFs like South Korea's EWY and Taiwan's EWT are getting crushed while China's FXI rallies. Luna pushes back on the conventional wisdom that a strong dollar signals a strong economy, and they leave listeners with a concrete framework for watching the dollar versus the euro and yen in the weeks ahead. #TradeWeightedDollar #USDIndex #StrongDollarParadox #TradeDeficit #ImportPrices #ChinaInflation #YenCarryTrade #HormuzTensions #ECB #SouthKoreaETFs #TaiwanETFs #FXI #EWY #EWT #GlobalMacro #EmergingMarkets #FexingoBusiness #EconomicsPodcast Keep every episode free: buymeacoffee.com/fexingo