The U.S Dollar had a difficult year & technical analysis is revealing something unexpected...
What has happened to the U.S. dollar in 2025, and what can we expect in 2026?
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Abstract:On Wednesday, U.S. stocks grew at the expense of the haven-associated USD, curbing its gains and punishing AUZ, NZD & GBP at the same time.
WikiFX News (13 Aug)- On Wednesday, U.S. stocks grew at the expense of the haven-associated USD, curbing its gains and punishing AUZ, NZD & GBP at the same time.
Among the currencies, NZD was still reeling from the RBNZ (Reserve Bank of New Zealand) rate decision for August while GBP also suffered and became the biggest loser in the aftermath of U.K. latest GDP data which showed a jaw-dropping figure
On Thursday, Asia-Pacific stock markets may rise as part of a sentimental echo effect after Wall Street trade. Accordingly, USD and JPY are possible to further retreat but turn around NZD's setback and put premium on AUD. Furthermore, AUD will be partly affected by the countrys jobs data for July.

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What has happened to the U.S. dollar in 2025, and what can we expect in 2026?

The US Dollar Index (DXY) remains steady near 98.00, supported by a mix of technical recovery and external currency weakness. While markets await definitive signals on the Fed's 2026 cutting cycle, technical breakdowns in major peers are driving price action.

The divergence between Federal Reserve guidance and market pricing is widening as traders position for 2026, setting the stage for significant volatility in the US Dollar. While the Fed’s latest dot plot conservatively suggests a single 25-basis-point rate cut in 2026, major financial institutions—including Goldman Sachs and Citi—are pricing in a more aggressive easing cycle of 50 to 75 basis points.

The market capitalization of the six largest US banks surged by approximately $600 billion in 2025, driven by a dual tailwind of financial deregulation and a resurgence in investment banking. This rally has widened the valuation divergence between American lenders and their European counterparts, reinforcing a theme of US financial exceptionalism that continues to influence global capital flows.