At the start of the year US companies move USD’s back into US parent companies. This tends to result in USD strength in the first few days of January.
Over the last 25 years, between January 01 January 09 the Dollar Index has gained in 19 years. The largest loss was -2.08% in 2004. The largest gain was +2.45% in 2005. Will there be gains in the dollar index again this year?
The medium term outlook for the USD remains bearish, but a short term correction would make sense as the dollar index sits in a key support level.
Trade Risks: The main risk to this trade is if the strong USD selling from the end of 2020 carries on.