The US dollar is reclaiming undisputed leadership in the global foreign exchange market, supported by a domestic artificial intelligence boom and persistently high energy prices. In a Friday note, Goldman Sachs observed that the macroeconomic divergence between the United States and the rest of the world is far larger than previously anticipated.

Global logistics disruptions and changing trade conditions are fundamentally reshaping the balance of power. While the US economy shows resilience, data from other regions point to a slowdown. April business activity data from China disappointed, and May PMIs in the eurozone continue to fall. Goldman Sachs conceded that its earlier call for a weaker dollar has not played out: every additional day of constraints to global commodity flows only strengthens the greenback.

Weakness in European currencies and a steady rise in the US dollar index directly reflect investor fears of a prolonged energy crisis in the EU driven by supply issues through the Strait of Hormuz. In Asia, meanwhile, the ultra‑strong dollar has already prompted emergency responses from central banks, forcing them into aggressive interventions.

Last week, Indonesia’s central bank tried to rescue the rupiah from a collapse by unexpectedly hiking its key policy rate by 50 basis points to 5.25%. The South Korean won is also taking heavy losses amid mass capital flight from the equity market, a trend that strong technology export volumes have so far failed to arrest.

Goldman Sachs anticipates that regulators in South Korea, India, and Taiwan will be forced to join a cycle of monetary tightening by year‑end. That remains their primary tool to curb capital outflows and inflation under a dominant dollar. Malaysia and Thailand are the likely exceptions, for now planning to keep interest rates unchanged.