US Dollar: Hurdles cap upside into 2026 – TD Securities

💡 DMK Insight

TD Securities is sticking to a bearish USD outlook for 2026, and here’s why that matters now: Even with the recent uptick in US economic data, which often fuels bullish sentiment for the dollar, the strategists believe underlying issues remain. This skepticism suggests that traders should be cautious about getting swept up in the ‘US exceptionalism’ narrative. If the dollar weakens, it could impact not just forex pairs but also commodities priced in USD, like gold and oil, which often see price increases when the dollar falls. Watch for key levels around the DXY index; a break below recent support could trigger further selling pressure. On the flip side, if the dollar does rally unexpectedly, it could catch many off guard, especially those heavily positioned against it. Traders should monitor economic indicators closely, particularly inflation and employment data, as these will be crucial in shaping the dollar’s trajectory. Keep an eye on the next Fed meeting for any hints on monetary policy shifts that could influence the dollar’s strength or weakness moving forward.