Financial sector news

Analysts at leading banking institutions, including Deutsche Bank and Goldman Sachs, expect the US currency to resume its decline next year. According to Bloomberg, the main reason for this trend is the policy of the US Federal Reserve (Fed), which continues to lower interest rates, while other central banks around the world are keeping them at current levels or even raising them.

Strategists at financial institutions predict that the dollar will weaken again in 2026. The key factor will be the gap in monetary policies: while the US is easing lending conditions, other countries are doing the opposite. This situation creates an incentive for investors to sell US debt obligations and transfer capital to countries with higher interest rates, where they can earn higher returns.
The consensus forecast compiled by Bloomberg predicts that the dollar index will fall by about 3% by the end of 2026.

“There are enough opportunities for markets to factor in a deeper cycle of rate cuts. This leaves plenty of room for further dollar weakness,” said David Adams, head of currency strategy at Morgan Stanley. His bank is even more pessimistic, forecasting a 5% drop in the dollar in the first half of next year.

In addition, the situation is complicated by the political context. President Donald Trump is expected to put pressure on the Fed to demand even more aggressive rate cuts. The Trump administration has historically favored a weaker dollar, as it benefits American exporters and helps combat the trade deficit.
Traders are already pricing in two quarter-point rate cuts next year. Recent comments by Fed Chairman Jerome Powell, who noted that the debate is about “cutting or waiting” rather than “raising,” have calmed markets but at the same time increased pressure on the currency.

Despite the general pessimism, some experts remain on the side of the US currency. Analysts at Citigroup and Standard Chartered believe that the powerful US economy, fueled by the artificial intelligence boom, will continue to attract investment. “We see strong potential for a cyclical recovery of the dollar in 2026,” the Citigroup team noted in its annual forecast. They believe that technological progress and economic growth will outweigh the interest rate factor.