Short-Term Support Still Possible
While the longer-term outlook tilts toward further dollar weakness, strategists warn the path is unlikely to be smooth. Continued enthusiasm around artificial intelligence, along with strong capital inflows into U.S. equity markets, could offer near-term support.
Temporary boosts from fiscal measures and government spending may also help stabilize the dollar early next year. But most investors see those factors as short-lived rather than structural.
For now, the dollar enters 2026 caught between fading U.S. exceptionalism and lingering demand for U.S. assets. Whether stabilization turns into a durable recovery or simply a pause before another leg lower remains one of the most closely watched questions in global markets.
