Institutions predict the dollar may fall in 2026 due to a Federal Reserve rate cut.

According to Luca Paolini, a strategist at Pictet Asset Management, the US dollar will face renewed weakness next year as slower economic growth paves the way for further interest rate cuts by the Federal Reserve. He pointed out that the dollar's interest rate differential is narrowing significantly. "We expect the US economy to weaken slightly, which will gradually alleviate inflationary pressures." In contrast, economic growth in other parts of the world is likely to improve, particularly in Europe and Japan. Furthermore, the dollar's valuation remains relatively high. Pictet predicts that the dollar index will fall from its current level of around 99.55 to 95 by the end of 2026. (Jinshi)