US dollar to weaken again in 2026

Rate differentials will favour peer currencies over the dollar

The US dollar will slide against peers again in 2026 though the moves will be more muted than in 2025.
Rates differentials will weigh on the US dollar as the Federal Reserve continues with rate cuts while peer central banks keep policy on hold or signal that they are preparing to move rates higher.
Emerging market currencies held up relatively well in 2025 notwithstanding the threats from tariffs and policy uncertainty.