If the question was whether the dollar retains its haven appeal in times of acute crises, the answer’s apparently “yes.”

And if the other question was whether higher US yields could still act as a magnet for capital flows despite pervasive jitters about America’s fiscal trajectory and the rule of law, the answer’s also “yes.”

After a very strong start to the week, the greenback flexed again on Tuesday, pushing a widely-cited gauge to a multi-month high.

As the figure above shows, the two-session rally for the DXY was on track to be the most pronounced in more than three years.

This is both good news and bad for Donald Trump. On one hand, his preferred method for righting the many “wrongs” foisted upon America during the hyper-globalization years is providing for a weak dollar. Simply put: An aggressively bid greenback’s kryptonite for “Tariff Man.”

On the other hand, the rally helps dispel one of the most pressing macro-market concerns about the administration. Last year (and early this year too, around the Greenland drama) Trump was bedeviled by allegations that between i) his erratic foreign policy, ii) openly hostile approach to relations with America’s traditional allies and iii) contempt for checks on his power, the dollar and Treasury yields could increasingly exhibit a negative correlation. Yields up, currency down would be a highly disconcerting state of affairs for any advanced economy, to say nothing of the world’s reserve currency issuer.

What we’ve seen so far this week, by contrast, is a dollar that’s firming on higher US yields, as the long-end trades heavy on the read-across for inflation from surging energy prices, while the hawkish implications of higher prices for US monetary policy have two-year yields back within 10bps of EFFR.

So, again, the dollar’s early-week rally is a good news, bad news story for Trump. As SocGen’s Kit Juckes put it, the price action “illustrates the limits of a weak dollar policy.” Trump can’t have his cake (shooting war) and eat it (his trade war) too.

Finally, the fact that the dollar’s up with oil serves as a reminder that old correlation assumptions no longer hold in an era when the US is a net energy exporter.