Dollar Faces Challenges Amid Fiscal Concerns and Policy Uncertainty

According to ChainCatcher, Charles Stanley's Abbas Owainati has highlighted in a report that the U.S. dollar will continue to face challenges in 2026. The primary reasons include concerns over long-term fiscal sustainability, policy uncertainty weakening its status as a safe-haven currency, increased currency hedging by non-U.S. investors, and changes in capital flows. Owainati noted that the dollar might remain under pressure next year as the Federal Reserve is expected to further cut interest rates. A weaker dollar could support emerging market equities by alleviating foreign debt burdens, improving capital flows, and increasing returns on local currencies.