Deutsche Bank
FX Blueprint 2026: The Great Rotation
Performance Snapshot
DXY
100.2
Target: 92
EUR/USD
1.15
Target: 1.25
USD/JPY
157
Target: 143
USD Bias
BEARISH
DXY Forecast Path
USD Sensitivity Analysis
Top Currency Pairs
| Pair | Direction | Status | Spot | Live | Trend | Dec 26 | vs Spot | vs Live |
|---|---|---|---|---|---|---|---|---|
| TRY | Sell TRY | -- | 42.45 | -- | 52.5 | -19.1% | -- | |
| HUF | Buy HUF | -- | 332 | -- | 288 | +15.3% | -- | |
| PLN | Buy PLN | -- | 3.67 | -- | 3.25 | +12.9% | -- | |
| AUD | Buy AUD | -- | 0.64 | -- | 0.72 | +12.5% | -- | |
| SEK | Buy SEK | -- | 9.54 | -- | 8.5 | +12.2% | -- | |
| NOK | Buy NOK | -- | 10.25 | -- | 9.15 | +12.0% | -- | |
| ZAR | Buy ZAR | -- | 17.31 | -- | 15.5 | +11.7% | -- | |
| NZD | Buy NZD | -- | 0.56 | -- | 0.62 | +10.7% | -- |
Explore Report Sections
Macro Trade Themes
The Great Rotation
Massive capital outflows from USD
The defining macro theme for 2026 is the Great Rotation -- a tectonic shift of global capital away from US assets toward Europe and Asia. Years of US asset overweight in global portfolios, combined with deteriorating US twin deficits and the emergence of European fiscal stimulus, create the conditions for a multi-year USD bear market. This is our highest conviction theme.
German Fiscal Supercycle
EUR on €1tn infrastructure
Germany's historic fiscal pivot represents a structural shift for European growth. The €1 trillion infrastructure and defense spending plan will lift Eurozone GDP by 0.5-1.0%pt annually, transform the growth outlook, and narrow the US-Europe growth gap that has driven USD strength for over a decade.
Yen's Revenge
JPY strongest conviction trade
JPY is our strongest single-currency conviction trade. The yen is 40% undervalued on REER, BoJ is normalizing while other CBs ease, and the carry trade is increasingly crowded. Any risk-off event could trigger a violent carry unwind. USD/JPY at 143 by year-end is achievable and potentially conservative.
Scandi Leverage
NOK/SEK high beta to Europe
Scandinavian currencies offer the highest beta to our European recovery thesis. NOK benefits from yield advantage and fiscal strength; SEK from rate sensitivity and manufacturing leverage. Both are significantly undervalued and will benefit disproportionately from the German fiscal supercycle.
EM Re-Rating
Broad EM longs
EM currencies are poised for a broad re-rating as the Great Rotation redirects capital toward higher-yielding markets. WGBI and EMBI rebalancing provide technical flow support, while improving fundamentals in key markets (ZAR, PLN, HUF) offer fundamental justification.