Core Viewpoint - Barclays Bank indicates that despite risks of economic weakness and challenges to the Federal Reserve's independence, the fundamentals supporting the US dollar remain solid, as evidenced by a 1.5% increase in the Bloomberg Dollar Index since the second half of the year [1] Group 1: Dollar Performance - The Bloomberg Dollar Index has risen approximately 1.5% since the second half of the year, reaching a three-week high following lower-than-expected initial jobless claims data [1] - Despite experiencing "unconventional bearish events," the US dollar remains stable, supported by its relative valuation advantage and a lack of alternative currencies for global investors seeking forex diversification [1][2] Group 2: Tariff Impact and Currency Valuation - Barclays believes that the actual value of the dollar is lower than what the current spot rate reflects, suggesting that the euro should be closer to 1.30 USD rather than the current rate of approximately 1.1670 USD, due to the distorting effects of tariffs [2] - The bank expresses skepticism regarding the notion that global investors are significantly increasing dollar forex hedging, as they face challenges in transferring exposure to other currencies due to risks associated with countries like Japan, Switzerland, and China [2] Group 3: Federal Reserve Independence - The main risk to Barclays' bullish dollar outlook is the potential threat to the Federal Reserve's independence, particularly in light of President Trump's attempts to remove Fed Governor Lisa Cook [2] - The future of the dollar may hinge on the Supreme Court's decision regarding Cook's position, as maintaining the Fed's credibility is crucial for economic stability [3]