Does the Dollar Have Fundamental Support?

The macro team at Guolian Minsheng, led by Tao Chuan, believes the dollar does have fundamental support, with the core lying in the structural evolution of liquidity mechanisms: overseas private sectors have replaced official institutions as the main force in dollar allocation. Attracted by the high returns of the AI technology wave and boosted by carry trade activities, substantial private capital has flowed back into U.S. equities, offsetting the downward pressure from Treasury expansion. However, this pro-cyclical system dominated by profit-seeking capital is extremely fragile, harboring risks of severe tail-end volatility.