This might be a historic time for the U.S. dollar.

Specifically, it’s nothing less than the end of the currency’s third significant rally since the collapse of the Bretton Woods system in the early 1970s, according to Kit Juckes, global macro strategist at Société Générale.

But it’s a “messy story” when looking at the dollar in trade-weighted terms, he said in a Thursday note (see chart below), and that means it’s no easy task figuring out which currencies to buy.

Société Générale

It’s certainly been a rough week for the U.S. currency, which fell toward 2019 lows versus the Japanese yen USDJPY, +0.05% and the Swiss franc USDCHF, +0.11% after the Federal Reserve on Wednesday didn’t dissuade investors from penciling in as many as two rate cuts by the end of the year, noted Kathy Lien, managing director of FX strategy at BK Asset Management.

The widely followed ICE U.S. Dollar Index DXY, +0.21% measures the currency against a basket of six major rivals, but isn’t trade-weighted. It’s off more than 1% this week, reflecting in large part a rebound by the euro EURUSD, -0.30% , which makes up more than 50% of the index. For the year to date, the DXY is off around 0.4%. The euro, however, remains down around 1.2% versus the dollar for the year to date.

Juckes said that much like the end of its two earlier long-term rallies in 1985 and 2002, a shift toward easier monetary policy by the Federal Reserve is playing a part, but China’s rising role in global trade and the adoption of the euro, which was launched just before the 2002 dollar downturn, make things more complicated than past market turns, he said.

After all, the dollar rally picked up steam in early 2014 as the dollar/yuan exchange rate USDCNY, +0.04% stopped falling and got an added boost when the European Central Bank adopted quantitative easing and lower rates, pressuring the euro, Juckes recalled.

With the euro and the yuan muddying the picture, the dollar’s turn is more apparent when viewed against gold US:GCQ19, which has rallied as expectations for Fed rate cuts have risen, breaking out to a five-year high on Thursday and topping the psychologically important $1,400-an-ounce level on Friday, he said.

“Given what we think the Fed will do in the next year or so, there is a lot further for gold prices to rise,” Juckes said. “But for the broad trade-weighted dollar to really fall, the euro has to turn higher, the yuan has to stop falling, and possibly the other two big components of the U.S. trade-weighted basket — the Canadian dollar USDCAD, +0.10% and Mexican peso USDMXN, +0.66% — need to turn too.”

But it will be hard for the euro to lead the charge higher with the ECB signaling it’s likely to employ further stimulus, despite angry remonstrations from President Donald Trump who contends the euro is being depressed to unfairly undercut U.S. exporters.

Read:‘Currency war’ fears rise as Trump slams Draghi’s hint at more ECB stimulus

That means a weaker dollar might be reflected in a stronger Swiss franc and Japanese yen before the euro makes a big move, he said. After all, the Swiss National Bank and the Bank of Japan both appear to be nearly out of ammunition when it comes to easing monetary policy and both currencies have a strong record of doing well during Fed easing cycles, Juckes argued.

Gaurav Saroliya, director of macro strategy at Oxford Ecoomics, also sees the case for a rally led by the likes of the yen and the Swiss franc as traders continue to unwind long dollar positions.

“Apart from being prime safe havens, the economies of the two currencies are also among the largest savers in the world. And this will probably be a crucial point of differentiation at a time when the dollar has deviated in recent months from the path suggested by the U.S. twin [budget and trade] deficits, which are likely to dictate a weaker greenback,” he said.

Read:Here’s what ‘twin deficits’ mean for the dollar and the Fed