According to experts, the U.S. dollar may continue to weaken in 2026, although the pace of decline is expected to be slower than this year. Derek Halpenny, Head of Forex Research at Mitsubishi UFJ, said that the dollar has already reached its peak and is now entering a long-term downward cycle.

He expects the U.S. Dollar Index to fall by around 5% in 2026. At the same time, the euro is projected to strengthen, potentially reaching 1.24 against the U.S. dollar.

📉 Why is the dollar weakening?

The main reason is the difference in monetary policy between the U.S. and Europe.

. Federal Reserve is expected to cut interest rates three to four times in 2026

.Meanwhile, the European Central Bank (ECB) is likely to keep its interest rates unchanged

Because of this policy gap, investors may prefer the euro over the dollar, putting further pressure on the U.S. currency.

Source: ChainCatcher (Mitsubishi UFJ – Derek Halpenny)