USD Index surges as perfect storm drives dollar strength across majors

The US Dollar Index has rallied to multi-month highs, with EUR/USD dropping 0.5% to test 1.0800 support, USD/JPY advancing above 150.00, and USD/CHF breaking through 0.8650 resistance. The dollar's broad-based strength stems from a confluence of factors including robust US economic data, widening interest rate differentials, and safe-haven demand amid global uncertainties. Recent US retail sales and employment figures exceeded expectations, reinforcing the Federal Reserve's higher-for-longer rate narrative. Meanwhile, weakness in European and Asian economies contrasts sharply with US resilience, attracting capital flows into dollar-denominated assets. Technical analysis shows the DXY breaking above its 200-day moving average at 104.50, targeting the 106.00 psychological level. Currency strategists warn that the dollar's momentum could accelerate if upcoming US GDP data surprises to the upside, potentially pushing EUR/USD toward 1.0750.