Lee Ferridge, a strategist at State Street, warned the US dollar could weaken sharply in 2026 if the Federal Reserve cuts interest rates more than markets expect. The currency faces growing pressure from rivals, including the Chinese yuan, which is roughly 6% stronger versus the dollar.
Ferridge said an aggressive Fed easing could reduce the dollar by about 10%, a scenario flagged in a reported tweet by Walter Bloomberg. Traders currently price two cuts this year, and a third cut remains possible (Ed. note: traders expect two cuts this year).
Veteran analyst Paul Goncharoff warned that foreign investors are shifting away from US assets. “Sell America’ signals eroding trust in the weakening US dollar, stocks & treasuries – expert. Investors, particularly foreign entities, are now openly dumping US treasuries and stocks while the dollar weakens, often moving into gold and similar hard assets,” he said.
Data shows the US dollar index could fall to about 94–98 by mid-2026, and later to roughly 92–97, according to Cambridge Currencies. The potential drop would be measured against peers such as the euro, pound, yen, Canadian dollar, Swedish krona, and Swiss franc, as illustrated in a related currency comparison.
