There's one thing missing in your thoughts. You said when the risk appetite is healthy Americans tend to invest abroad, and thats true. When it churn money goes again to US, as Soros said, the money travels from center to periferia looking for better returns but when something changes like risk, volatility, or hike rate cycle, money return from periferia to center, meaning center developed countries and periferia developing countries. Ok. But the piece missing here.... is when the cash generator from companies could be at risk, companies tend to pull credit lines and cash flow from other countries to USD to have a stock of cash in place, remember, cash is king. So when a liquidity stress starts showing, USD will rise. That's what happens in covid for example and then FED needs to pump liquidity in the system. Always... if there's another piece that is restraining liquidity in USD it will show in a spike in USD price.