Will the US dollar continue to fall? The Federal Reserve may cut interest rates in 2026, potentially continuing to pressure the dollar

【Blockchain Rhythm】 Recent analyses indicate that after experiencing significant depreciation this year, the US dollar will still face downward pressure next year.

Looking at this year’s performance, the continued weakening of the dollar is not accidental. On one hand, concerns about the long-term fiscal sustainability of the United States are increasing; on the other hand, uncertainties surrounding Federal Reserve policies are diminishing the dollar’s appeal as a safe-haven currency. Meanwhile, non-US investors have increased currency hedging operations, and coupled with changes in global capital flow patterns, these factors intertwine to jointly drive the dollar’s depreciation.

Looking ahead to 2026, the pressure seems not to have been fully released. The Federal Reserve is expected to continue its rate-cutting cycle, which means the dollar may face even more pressure—after all, the interest rate environment directly affects investors’ attraction to dollar assets.

Interestingly, the dollar’s softening is a significant boon for emerging markets. A weaker dollar can effectively reduce the external debt burden of these countries, improve capital flow conditions, and increase the relative returns on local currency investments, all of which provide tangible support for emerging market stock markets.