Bank of America
FX Outlook 2026: Structural Dollar Headwinds
LIVE5 December 2025USD bearish
Back to CurrenciesBearish
USD/USD
Bearish USD on structural twin deficit headwinds and narrowing rate differential
Key Drivers
Twin deficit deterioration
Fed easing cycle
European fiscal expansion
Global growth rotation
All Firm Targets (Dec '26)
Analysis Summary
Bearish USD on structural twin deficit headwinds and narrowing rate differentials. Most USD weakness expected after Q1 as European fiscal stimulus gains traction and global growth rotation accelerates. DXY targeting 93.5 by year-end.