DBS Group Research revised its US Dollar forecasts lower against most major and Asian currencies, citing increased uncertainty around Federal Reserve leadership and independence, ongoing de-dollarisation trends, and rising US political risks ahead of the November midterm elections.<\/p>\n
It added that the Dollar has been receiving less support from interest rate differentials and the relative strength of US economic performance, arguing that institutional credibility and political factors are increasingly driving FX moves.<\/p>\n
DBS expects two Federal Reserve rate cuts in 2H26 and sees de-dollarisation continuing as a medium-to-longer term headwind for the currency.<\/p>\n
The report was attributed to DBS Group Research\u2019s Philip Wee, while FXStreet noted the item was produced with an AI tool and reviewed by an editor, and that its Insights Team selects market observations and adds analysis.<\/p>\n
With the dollar no longer propped up by high US rates or uniquely strong US growth, the focus shifts to institutional credibility and political risk as key inputs into the currency\u2019s direction, implying near-term risks may skew toward further dollar softness.<\/p>\n
The view that the Fed will cut rates twice in the second half of 2026 has been reinforced by recent data showing January inflation cooled to 2.8%, which for traders can make bearish positioning via DXY put options more compelling, especially if a move toward the 100 level becomes more plausible.<\/p>\n
Into the November midterm elections, increased political noise and uncertainty around fiscal policy may lift volatility, and with early polling suggesting a tight fight for Congress, strategies such as option straddles in major pairs like EUR\/USD could better fit an environment where larger swings in either direction become more likely.<\/p>\n
De-dollarisation also remains a background driver, reinforced by end-2025 reserve data showing the dollar\u2019s share of global reserves falling to 58.1%, supporting allocations that may benefit from dollar weakness such as the Swiss franc or gold exposure via futures.<\/p>\n
Finally, the memory of 2023 debt ceiling gridlock limiting sustained dollar strength offers a parallel: if similar political constraints re-emerge, dollar rallies could prove short-lived and more tactical selling opportunities, consistent with the idea that the US exceptionalism premium may be pausing.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" DBS cut USD forecasts, citing Fed independence uncertainty, de-dollarisation, and rising US political risks ahead midterms.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41955","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41955"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41955\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}