Through all the static of the global economy, one constant has held true for the past decade: the U.S. dollar has been a counter-cyclical safe haven. It weakens when the business cycle improves, and rises when higher-yielding assets fall (and vice versa.)
The dollar has soared in the new era of good feelings, following strong
That development would mark a sea change — even in a market as dizzying as foreign exchange, where political events, central bank decisions and plain vanilla tactical investments can affect prices in a millisecond.
David Woo, head of global rates and currencies research at Bank of America Merrill Lynch, has an interesting theory as to why this is the case, and it has to do with the booming U.S. energy market.
Woo argues the dollar's longstanding pattern of weakening on good news and strengthening on bad is breaking down, largely because of growing U.S. energy development.
"The move towards energy independence reduces the U.S. current account deficit while extending [its] growth advantage over Europe and Japan," he says, calculating that the shift could boost U.S. GDP output relative to Europe by 1.5 percentage points.
Producing more domestic energy "will likely also help break the vicious circle between the dollar and oil prices that has been a major source of volatility for the U.S. economy."
China's explosive economic growth in recent years has been a big reason for the dollar's trading patterns in recent years, Woo says.
The U.S. has benefited little from China's growth, since American exports to China are relatively small. At the same time, however, U.S. energy demands are enormous relative to China's. That has left the world's largest economy — and its currency — at the mercy of swings in global energy demand.
"The rapid growth of Chinese demand for energy over recent years has represented a bigger negative terms of trade shock to the US than to other countries," Woo added. "It is not a coincidence, in our view, that as Chinese oil consumption rose, the dollar fell steadily."
Now, with U.S. energy consumption lower and production on the rise, the situation is reversing itself.
(Read more: CNBC: OPEC Sees 2013 World Oil Demand Downside Risk)
"The full potential of the US energy independence story," Woo says, "is a game changer for the US in the global competitiveness landscape, especially against China and Europe." And this time around, he says, the good news should benefit the greenback.
Other factors may be supporting the dollar's newfound strength, mainly having to do with overseas investors sinking money into U.S. markets. Jens Nordvig, global head of FX strategy at Nomura Securities, has also noticed that the dollar is trading differently, and he thinks part of the reason is foreign inflows.
"Foreign inflows into U.S. risk assets, especially equities, are picking up (driven by flows from Europe in particular)," he wrote in a note to clients.
Nordvig estimates that net cross-border equity inflows will total between $100 billion and $150 billion this year, after having been close to zero for the past several years.
"From a shorter-term perspective, we worry that the U.S. data picture will see a hiccup in Q2, posing a challenge to dollar gains," he says. "But from a longer-term perspective, we think the flow story is improving meaningfully, which should support the dollar over time."