The Federal Reserve's rate cut cycle is here, and 2026 might not be a good year for the US dollar.

In recent years, the dollar has dominated with high interest rates, but the tide is turning. A report from UK asset management firm Charles Stanley exposes this bubble—the US fiscal issues are piling up, policy uncertainties are increasing, and the dollar's "safe haven halo" is fading. In simple terms, the dollar is no longer the only safe asset.

This is accompanied by a major shift in global capital. Institutional investors are starting to hedge with non-US currencies, using assets outside the dollar to balance risk. Once the Fed truly begins a rate cut cycle, the dollar's interest rate advantage will be completely eroded, which will be a double blow to dollar assets.

Conversely, this presents a window of opportunity for emerging market assets. When the dollar weakens and undervalued assets are re-priced, the investment logic for 2026 becomes clear: the dollar cycle has peaked, and opportunities in non-dollar assets are emerging. Valuations of risk assets are recovering, and the time to position in bottom assets is now.

The real money-making opportunities are hidden outside the dollar.