US dollar projected to fall in 2026: driven more by cyclical trends than by fundamental shifts
Assessing the Dollar’s Strength Over Time
Despite frequent claims about the dollar’s weakness, it remains robust when viewed through a long-term lens. To truly gauge the dollar’s value, it’s useful to examine a trade-weighted index that accounts for differences in consumer prices—offering a ‘real’ exchange rate perspective rather than just a nominal one.
According to the Federal Reserve’s index, which tracks the dollar against 26 major trading partners, the currency’s recent decline has had minimal impact on the impressive 45% appreciation seen since 2011. This enduring strength helps explain why many investors last year continued to support the dollar’s resilience.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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