JPMorgan Chase: The US dollar is expected to weaken in 2026, but the risk of Fed rate hikes may shake this view According to a report by Golden Finance, a team of currency strategists led by Meera Chandan and Arindam Sandilya at JPMorgan had predicted that the US dollar would strengthen after Trump became president this year. However, as the US dollar's performance in the first half of the year hit its worst in 50 years, the team had to quickly adjust their views. The team's view on the US dollar turned negative in March and has maintained this position ever since. Strategists now expect the US dollar to decline by about 3% by mid-2026 and then stabilize. However, analysts point out that there are several main factors that complicate the bank's bearish view. Firstly, despite the recent interest rate cuts by the Federal Reserve, US interest rates are still higher than many other central banks around the world. They stated that this makes global investors more inclined to store their funds in the United States and limits the attractiveness of diversification into assets outside the United States. More broadly speaking, the risk that JPMorgan Chase is concerned about is that a rebound in the US job market or growth expectations may prompt traders not only to rule out the possibility of a rate cut next year, but also to increasingly raise their bets on potential rate hikes. In 2026, there will be a net bearish view on the US dollar, although the magnitude and breadth will not be as significant as in 2025, "Chandan and colleagues wrote.