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.
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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 (electric blue) over time vs the market's (Polymarket, amber), 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. Loading the probability audit trail…
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.