US Dollar Stability Analysis: Rabobank's Jane Foley Outlook and Market Context

This analysis is based on the Bloomberg report featuring Jane Foley’s commentary on US dollar stability [1], published on November 3, 2025. Foley, Head of FX Strategy at Rabobank, stated “I’m really beginning to question whether or not we’re gonna see any significant dollar losses from this juncture in” and described the US dollar as “A Lot More Stable” moving forward [1].

The dollar’s recent performance supports Foley’s stability thesis. Despite having its worst start to a year on record in the first half of 2025, the US dollar has shown remarkable stability since April 2025 [2]. Current market data shows the DXY exchange rate at 99.8723 on November 3, 2025, up 0.07% from the previous session, with the index ending last week almost exactly at its six-month average and significantly outperforming its G10 currency peers over the past month [3].

Foley’s perspective challenges the prevailing “debasement trade” narrative that gained traction earlier in 2025 [2]. She argues that debasement would imply a move away from the dollar and U.S. Treasuries into assets such as gold, but there is very little evidence to back up these flows [2]. While investors remain skeptical of the dollar compared to pre-Trump administration periods, they still want exposure to the U.S. economy and stock market, just not necessarily the dollar currency itself [2].

The bond market provides strong support for Foley’s stability thesis. Key indicators include:

• 10-year Treasury yield at 3.93% (lowest in over a year, excluding April turmoil) [2]
• 10-year Treasury yield down nearly 60 basis points in 2025 [2]
• 30-year TIPS breakeven inflation rate at 2.21% (lowest since May) [2]

These metrics contradict debasement concerns and suggest continued confidence in U.S. debt markets.

A significant development supporting dollar stability is the high level of currency hedging. As much as 80% of portfolio inflows into the U.S. are now currency hedged, according to UniCredit estimates [2]. This allows investors to gain exposure to U.S. assets without direct dollar exposure, reducing pressure on the currency while maintaining capital flows into U.S. markets.

US equity markets have shown strong performance, which typically supports dollar strength:

• S&P 500: +2.45% over 30 days [0]
• NASDAQ Composite: +4.78% over 30 days [0]
• Dow Jones: +2.23% over 30 days [0]

This equity strength combined with currency hedging creates a unique dynamic where U.S. asset performance doesn’t necessarily translate to dollar weakness.

1. Policy Uncertainty
   : Trump administration’s unorthodox policy agenda continues to add fuel to debasement concerns [2].

2. Fiscal Pressures
   : Increased U.S. government borrowing and rising public debt projections [2].

3. Rate Cut Environment
   : Federal Reserve interest rate cuts resuming while inflation remains above 2% target for the sixth consecutive year [2].

4. Gold Performance
   : Gold has risen 50% in 2025, suggesting some investors are seeking traditional inflation hedges [2].

1. Treasury Market
   : Watch for sustained yield movements above 4% on 10-year Treasuries [2].

2. TIPS Breakevens
   : Monitor inflation expectations via 10-year and 30-year TIPS breakeven rates [2].

3. Currency Hedging Flows
   : Track the percentage of currency-hedged portfolio inflows into U.S. markets [2].

4. G10 Performance
   : Continue monitoring dollar’s relative performance against other major currencies [2].

Several factors could challenge Foley’s stability thesis:

• Sustained Treasury yield increases above 4.25%
• Rising TIPS breakeven inflation rates above 2.5%
• Increased currency hedging activity beyond current 80% levels
• Significant underperformance against G10 currency peers

Jane Foley’s stability outlook appears well-supported by current market data. The dollar is trading near 99.8723, up 0.07% from the previous session, with expectations to trade at 99.39 by end of Q4 2025 [3]. The currency has shown remarkable resilience since April 2025, ending last week almost exactly at its six-month average and outperforming G10 peers [2].

The technical picture suggests a potential bottoming process, with support levels around the 99.50-100.00 range [3]. The combination of strong equity performance, high currency hedging levels, and stable Treasury markets creates a foundation for continued dollar stability despite ongoing concerns about fiscal policy and inflation.

However, decision-makers should remain vigilant about policy developments from the Trump administration and monitor key indicators including Treasury yields, TIPS breakeven rates, and currency hedging flows for any signs that could challenge the current stability thesis [2].