With the new year 2026 around the corner, the world markets are now expecting a pivotal shift. The new year energy is now weaving into the narrative, with investors expecting the US dollar to stand tall against pressure. But it seems that the new macro developments brewing slowly may end up pushing the USD into the corner, with 2026 signaling more pressure for the dollar to deal with.

Also Read: Two Bullish Developments Are Quietly Lining Up a Bitcoin Breakout

USD May Continue To Attract Pressure

Per a recent report by Investing, the US dollar may continue to portray a wobbly stance in 2026. The portal shared how Trump is looking forward to hiring a new Fed chief, with Kevin Hassett taking the lead in this race. Moreover, the FOMO rate cut stance may also intensify in 2026, adding pressure on the US dollar.

Alongside that, investors are also afraid of Japan’s lucrative local market stance. The Japanese government is expediting efforts to strengthen its local assets. This new narrative has sparked fears of repatriation, with the country dumping US treasury bonds to pivot towards its own local offerings.

Morgan Stanley Predicts Further Downfall for USD in 2026

According to the latest report by Morgan Stanley, the DXY index could hit as low as 94 before a rebound, causing distress to the dollar’s present value propositions.

“The U.S. dollar is likely to be on a choppy path over the next 12 months, with continued weakening in the coming months followed by a recovery and an end to the dollar’s bear market in the second half of 2026… The U.S. dollar index, currently around 100, could fall to 94 in the second quarter of 2026 and rise back to 100 by the end of the year,” noted Morgan Stanley’s outlook.

Also Read: 10 EU Banks Plan Euro Stablecoin: Challenge to The US Dollar?