Fed Chairman Powell tilted a tad more dovishly yesterday but that hasn’t weighed on the US dollar. Instead, it’s rallying strongly today led by a 100 pip climb in USD/JPY to a session high of 148.67.

That’s the best level since September 4 and a strong recovery from the 145.50 level in the immediate aftermath of the Fed cut. The level to watch now is 149.13, which was the September high. If that cracks, expect a retest of 150.00 or the August high.

The market may be sensing a stronger US economy, particularly in light of the non-stop equity market rally since Liberation Day. That could boomerang back into business confidence (which has ticked up), hiring, growth and ultimately inflation. Today, Treasury yielsd have ticked up but only 1-2 bps across the curve.

Overall, this looks like a flow-driven dollar rally but it’s an impressive one.