An unstable currency equilibrium | Insight Investment

Francesca Fornasari, Head of Currency

Key takeaways:

• The US dollar faces structural headwinds, but the erosion of its reserve‑currency status remains gradual.
• Cyclical forces, notably growth and monetary‑policy differentials, are likely to be the primary drivers of performance in 2026.
• Overall, the dollar sits in an unstable equilibrium; the trend should be lower, but strong US data or geopolitical flare‑ups could still offer reprieve.