Mitsubishi UFJ: The US Dollar may weaken further by 2026.

Derek Halpenny, head of foreign exchange research at Mitsubishi UFJ Financial Group, pointed out that the US dollar may continue to depreciate in 2026, but the decline will be more moderate than this year. He emphasized: "We basically believe that the US dollar has peaked and is currently at the beginning of a multi-year downward cycle." It is expected that the US dollar index will fall by about 5% in 2026, a forecast that is consistent with the expectation of the euro rising to 1.24 against the US dollar. The bank believes that the main factors driving the weakening of the US dollar are monetary policy differentiation: the Federal Reserve is expected to implement three to four interest rate cuts in 2026, while the European Central Bank may maintain interest rates unchanged, thus supporting the euro and weakening the relative attractiveness of the US dollar.