According to BofA, the dollar's strength in recent years stemmed from the US growth and productivity differential, as well as the "exorbitant privilege."

What has changed is that, since 2025, the DXY has weakened even with long-term interest rates stable between 4.0% and 4.5%.

There is a clear decoupling between the dollar and Treasuries, suggesting that some of the premium has already been lost.

It's not a collapse of exceptionalism, but it opens up space for more rotation and some currency easing ahead.