The dollar’s back — and it’s catching traders off guard. After suffering its steepest first-half decline in decades, the greenback has roared back, with the Bloomberg Dollar Spot Index up about 2% since mid-year. Hedge funds are now piling into bullish bets as the euro and yen tumble, fueled by cautious Fed signals around further interest-rate cuts and political turmoil abroad.

The comeback marks a sharp turn from early 2025, when President Donald Trump’s tariff talk and pressure on the Fed sparked a wave of dollar selling. But those fears of foreign investors fleeing the US never quite materialized, as megacap tech stocks and steady overseas demand at Treasury auctions kept the money flowing in.

The rally is stinging some of Wall Street’s biggest bears — Goldman, JPMorgan, and Morgan Stanley among them — and rattling emerging markets. Some skeptics are switching sides, betting that a resilient US economy and fewer rate cuts will keep the dollar’s edge intact. -Jui Chakravorty

What You Need to Know Today

Japan’s long-standing ruling coalition has collapsed, dealing an early blow to Sanae Takaichi just as she prepares to become prime minister. Her Liberal Democratic Party and junior partner Komeito failed to reach agreement on political funding reforms, ending a partnership that has underpinned Japanese politics for decades. Komeito leader Tetsuo Saito said his party will not back Takaichi in the upcoming parliamentary vote or campaign with the LDP, leaving her to govern without a majority in either chamber. While Takaichi is still expected to secure the premiership, the breakdown threatens to paralyze policymaking and further destabilize Japan’s political landscape.

India’s Prime Minister Narendra Modi and President Trump held a phone call in which they “reviewed the good progress achieved in trade negotiations," signaling renewed momentum toward a potential deal. Calling Trump his “friend" in a social media post, Modi said the two leaders agreed to stay in close contact in the coming weeks. This is the second call between them in less than a month, as the two major economies seek to ease tensions over tariffs and New Delhi’s ties with Russia. While optimism is rising, analysts caution that after months of ups and downs, any breakthrough is still far from guaranteed.

India is launching a financial revolution by drawing millions of low-income earners into the stock market through bite-sized mutual fund plans starting at just $3 a month. Backed by regulators, the initiative aims to channel household savings — traditionally parked in cash and gold — into equities, potentially unlocking trillions in new investment over the next decade. While policymakers hail it as a step toward democratizing finance, experts warn that without investor education and safeguards, India’s newest shareholders could face hard lessons when markets turn volatile.

Distributor Tryambak Nayak with prospects in August. Photographer: Ashutosh Joshi/Bloomberg

India’s IPO boom shows no sign of slowing, with Citigroup projecting up to $20 billion in share sales over the next year — a record pipeline spanning tech, healthcare and consumer sectors. Already this year, IPOs have raised $12 billion, with another $5 billion expected this month from big names like Tata Capital and the India unit of LG Electronics. The surge is fueled by strong domestic demand, even as foreign funds pull back amid US tariff concerns and softer profits. Upcoming listings from Pine Labs, Meesho, and ICICI Prudential AMC, plus a potential blockbuster Reliance Jio IPO, underscore India’s growing clout as one of the world’s most active markets for new listings.

SoftBank Group is in talks to raise $5 billion through a margin loan backed by shares of its chip unit Arm Holdings, boosting its total borrowing against Arm stock to $18.5 billion. The funds are expected to fuel Masayoshi Son’s aggressive push into AI, including further investment in OpenAI and large-scale projects like the $500 billion “Stargate” data center initiative. Arm’s 38% rally this year has strengthened SoftBank’s balance sheet, giving Son more leverage to expand his AI empire — even as analysts warn that the company’s mounting debt and M&A spree heighten financial risk amid a potential AI investment bubble.

HashKey Group, operator of Hong Kong’s largest licensed crypto exchange, has confidentially filed for an IPO that could raise up to $500 million, according to people familiar with the matter. The potential listing — possibly as soon as this year — would test Asia’s appetite for crypto-related stocks while boosting Hong Kong’s efforts to cement its status as a digital-asset hub despite China’s crypto ban. Backed by Gaorong Ventures with a pre-money valuation above $1 billion, HashKey runs trading, venture and asset management operations across Hong Kong and Singapore.

The US Senate has passed a measure requiring Nvidia and AMD to give American companies priority access to advanced AI chips ahead of Chinese buyers, aiming to strengthen US competitiveness and limit tech exports to adversaries. The bipartisan provision, part of the annual defense policy bill, comes amid growing tension over AI supply chains and national security. However, its fate is uncertain — the House version of the bill omits the export-control language, setting up negotiations that could strip it out before becoming law.

What You’ll Need to Know Tomorrow

For Your Commute

Wellness is fast replacing nightlife as the new social currency in global hospitality. As drinking falls out of favor, nightclub owners are opening up health facilities, and hotels are throwing alcohol-free full moon parties, writes my colleague Sarah Rappaport. From London’s Tramp nightclub launching a wellness club to Rosewood Mayakoba’s moonlight yoga and Soho Farmhouse Ibiza’s health retreats, hotels and members’ clubs are reinventing themselves for a generation that’s trading late nights and cocktails for breathwork, ice baths, and cacao rituals. 

This cultural shift is fueling a booming $830 billion wellness tourism industry, pushing luxury brands to compete over who can deliver the most restorative experiences. Even traditional party destinations like Saint-Tropez and Ibiza are now offering onsen-style thermal baths and IV drips. As one hotel executive put it, the new idea of living is about “health, vitality, and belonging.”

The entrance to Sense, the spa at Rosewood Mayakoba. Source: Rosewood Hotels

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