The dollar is headed for its best two-week stretch in six months, supported by the Federal Reserve’s hawkish pivot, strength in the artificial intelligence boom, and heightened global tensions. The Bloomberg Dollar Spot Index has gained about 2% over the past two weeks, reaching its highest level since July. Asset managers and strategists say this rally is likely to support the currency through the rest of the year.

Andreas Koenig, head of global FX at Amundi, noted the US leads in AI capex spending and corporate earnings, reinforcing the dollar’s appeal. Alex Cohen, a strategist at Bank of America, said the risk for dollar strength continuing into year end has increased. The dollar index climbed 1.6% in September after declines in July and August, aided by seasonality, as the final full week of September has historically been strong for the dollar.

Despite Treasury Secretary Scott Bessent’s bond buybacks and efforts to support the yen—moves seen as negative for the dollar—the currency has advanced. Daragh Maher, senior FX strategist at HSBC, described the relationship between Treasury yields and the dollar as ambiguous due to high US fiscal deficits, expecting only modest appreciation. Nathan Thooft, senior portfolio manager at Manulife Investment Management, warned that cooling inflation or labor data could limit further upside if the Fed dials back its hawkish stance.