MUFG
2026 FX Outlook: Post-Peak USD World
LIVE19 December 2025USD bearish
Back to CurrenciesBearish
USD/USD
We expect the USD to decline approximately 5% on a DXY basis in 2026, reaching 9
Key Drivers
Twin deficit expansion
Fed easing cycle
Growth convergence
Portfolio rebalancing
De-dollarization trends
All Firm Targets (Dec '26)
Analysis Summary
We expect the USD to decline approximately 5% on a DXY basis in 2026, reaching 95.0 by Q4. The post-peak USD world is driven by narrowing US growth exceptionalism, expanding twin deficits, and Fed easing. Unlike Morgan Stanley, we see steady dollar weakness without an H2 recovery.