What if a flight-to-safety surge drives the dollar index above 120?
A flight-to-quality DXY above 120 is a wrecking ball: it breaks pegs, crushes EM-FX and EUR/GBP/AUD, and forces coordinated-intervention talk as the funding squeeze hammers high-beta risk. Rhymes with the September 2022 dollar peak that drew the UK/Japan intervention and the 1985 pre-Plaza overshoot; the supplied Louvre/Plaza analogue is apt. Forward: a higher US deficit and term premium mean the haven bid coexists with long-end fragility, a tension absent in 1985.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A flight-to-quality dollar surge sends DXY above 120, breaking pegs and forcing coordinated G7 intervention talk. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▲ · FX carry appetite ▼ · Risk appetite ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.8% hist -9.69–+3.54% · other way +23.24% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.6% hist -1.46–-0.59% · other way -3.1% (n=10) |
| 3 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.2% model prior · unmeasured |
| 4 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.1% hist -0.68–-0.37% · other way +0.63% (n=12) |
| 5 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.1% hist -8.04–+5.12% · other way +2.79% (n=11) |
| 6 | Turkish lira TRY 📈 chart | FX | ▼ -1.2% hist -10.23–+2.49% · other way -0.66% (n=12) |
| 7 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +1.1% hist +0.2–+0.58% · other way +1.04% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -5.54–+2.91% · other way +9.75% (n=11) |
| 9 | Aussie dollar AUD 📈 chart | FX | ▼ -0.9% hist -1.41–+0.06% · other way -1.81% (n=12) |
| 10 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -1.0% hist -1.52–+0.08% · other way -1.12% (n=12) |
| 11 | Indian rupee INR 📈 chart | FX | ▼ -1.0% hist -1.57–+0.11% · other way -0.75% (n=12) |
| 12 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.8% hist -0.76–-0.21% · other way -0.64% (n=12) |
| 13 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.7% hist -0.29–+0.7% · other way -7.07% (n=12) |
| 14 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.63–-0.28% · other way +0.75% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade's SHORT on AVGO: +24% Sheinbaum and +17% lira-2021 analogues are AI-capex regime prints overwhelming any FX channel — a DXY-120 flight-to-quality crushes semis, history is swamped by the AI driver.
Historical precedent — what analogous events actually did
Across 29 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| TRY TRY | SHORT | -8.7% · 5d -1.4% | 79% | 14 | 0.54 | ✓ matches cascade |
| CNY CNY | SHORT | -0.5% · 5d -0.4% | 79% | 14 | 0.46 | ✓ matches cascade |
| AMD AMD | SHORT | -3.2% · 5d -3.0% | 73% | 25 | 0.42 | ✓ matches cascade |
| JPM JPM | SHORT | -3.1% · 5d -1.6% | 73% | 25 | 0.41 | ✓ matches cascade |
| AVGO AVGO | LONG | +2.9% · 5d -1.1% ↺ fades | 71% | 14 | 0.39 | ⚠ differs |
| MU MU | SHORT | -7.8% · 5d -4.9% | 69% | 25 | 0.36 | ✓ matches cascade |
| SOL SOL | SHORT | -0.2% · 5d -6.7% | 71% | 7 | 0.35 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.6% · 5d -0.1% | 71% | 14 | 0.34 | ✓ matches cascade |
| XLF XLF | SHORT | -0.2% · 5d -0.1% | 67% | 15 | 0.31 | ✓ matches cascade |
| INR INR | SHORT | -0.9% · 5d -0.3% | 64% | 14 | 0.27 | ✓ matches cascade |
| COIN COIN | SHORT | -0.6% · 5d +0.8% ↺ fades | 67% | 6 | 0.27 | ✓ matches cascade |
| AUD AUD | SHORT | -0.8% · 5d -0.8% | 64% | 14 | 0.25 | ✓ matches cascade |
| SPX SPX | LONG | +0.9% · 5d +0.3% | 64% | 27 | 0.22 | ⚠ differs |
| MSTR MSTR | SHORT | -8.4% · 5d -5.4% | 62% | 16 | 0.19 | ✓ matches cascade |
Why this probability
DXY above 120 breaking pegs is an extreme haven move; dollar firm but far from that, 6mo. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.