Notable dollar forecast for 2026
HSBC predicts that the dollar could hit its lowest level in the first quarter of 2026 before potentially recovering. While the Fed is expected to cut interest rates in December, no further cuts are anticipated in 2026.
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HSBC Global Investment Research strategists stated that the US dollar could reach a bottom in the first quarter of 2026 and gain value thereafter. The strategists noted that the US Federal Reserve (Fed) may cut interest rates in December, but no further cuts are expected throughout 2026.
Although money markets remain uncertain about a potential rate cut in December, a total of 85 basis points of cuts are being priced in by the end of 2026.
HSBC also projects that the Euro will rise to 1.20 dollars in the final quarter of this year and the first quarter of next year, before retreating to 1.18 dollars for the remainder of 2026. The Euro was last trading down 0.1 percent at 1.1587 dollars.