The dollar concluded 2025 experiencing its most significant annual decline in eight years, a trend that investors anticipate will continue into the new year, particularly if the next Federal Reserve chair implements deeper interest-rate cuts. The Bloomberg Dollar Spot Index decreased by approximately 8% over the year, and market analysts are forecasting further weakening of the currency.
The dollar's struggles began following President Trump's implementation of tariffs in April, and it failed to recover substantially, largely due to expectations that Trump would appoint a dovish successor to current Fed Chair Jerome Powell, whose term expires next year. Yusuke Miyairi, a foreign-exchange strategist at Nomura, stated that the primary factor influencing the dollar's performance in the first quarter of the upcoming year will be the Federal Reserve. He emphasized the importance of not only the January and March meetings but also the identity of the next Fed chair.
Expectations of at least two rate reductions in the coming year have created a divergence between the Fed's policy path and that of some of its developed-nation counterparts, diminishing the dollar's attractiveness. According to data released Wednesday by the Commodity Futures Trading Commission, traders increased their bearish dollar bets in the week ending December 23. Options trading suggested further dollar depreciation in January, with a potential moderation of this trend in subsequent months.
The anticipated shift in Fed leadership and the potential for lower interest rates are key drivers behind the dollar's projected weakness. The appointment of a dovish Fed chair could signal a prolonged period of accommodative monetary policy, which typically weighs on a currency. The divergence in monetary policy between the U.S. and other developed economies, such as those in Europe, further exacerbates the dollar's challenges. While the Fed is expected to ease policy, other central banks may maintain or even tighten their stances, making their currencies more appealing to investors.
Multi-Source Journalism
This article synthesizes reporting from multiple credible news sources to provide comprehensive, balanced coverage.
Deep insights powered by AI
Continue exploring
In 2025, a team of forecasters revisited 25 predictions made at the start of the year, achieving an impressive 80% accuracy rate. This exercise in predictive analysis highlights the increasing sophistication of forecasting methodologies and their potential for informing decision-making across various sectors.
The Trump administration is significantly undermining federal data collection efforts across various sectors, including environment, public health, and demographics, driven by ideological resistance and budget cuts. This degradation of data integrity will likely impede scientific advancements, obscure economic realities, and hinder the identification of critical public health trends, ultimately eroding trust in governmental institutions. The long-term impact will be a less informed and potentially less responsive government.
A Vox video recaps the tumultuous events of 2025, highlighting political shifts like a second Trump administration and Gen Z-led protests. The year also saw cultural phenomena such as the rise of Labubu and China's AI advancements with DeepSeek, amidst growing global unrest and US military action.
Vox's Future Perfect team has released its annual predictions for 2026, covering a range of global issues from the state of US democracy and potential economic recession to geopolitical hotspots like Taiwan and cultural trends in the US. The forecasts, assigned with probability ratings to reflect the team's confidence, aim for transparency in acknowledging the knowns and unknowns of predicting future events.
Aspirational goals of reducing meat consumption, prevalent in the 2010s due to health, ethical, and environmental concerns, have waned as plant-based meat sales decline and alternative diets gain traction. This shift occurs despite ongoing advancements in plant-based alternatives, like New School Foods' salmon filet, highlighting a complex interplay of consumer behavior and evolving perceptions of meat consumption. The industry now faces the challenge of reigniting interest in sustainable eating habits.
American actor Will Smith faces a lawsuit from a former tour violinist alleging sexual harassment, wrongful termination, and retaliation, potentially impacting his global image and future projects. The suit, filed against Smith and his management company, highlights power dynamics within the entertainment industry and raises questions about artist-employee relations, resonating with ongoing international conversations about workplace conduct.
Hold up, MTV didn't actually kick the bucket on New Year's Eve, despite the rumors swirling online! While some international MTV music channels did close up shop, the main network is still churning out content, even if it's more *Big Bang Theory* than Buggles these days, signaling a major shift in its cultural relevance and audience draw.
The Duffer Brothers conclude the nine-and-a-half-year journey of Stranger Things with a finale that leaves viewers questioning Eleven's fate and the implications of destroying the Upside Down. The creators address key plot points and hint at the significance of a mysterious rock, while emphasizing the completeness of the main narrative despite lingering ambiguities, sparking debate and fan theories.
The creators of "Stranger Things" are defending a character's coming out scene after it triggered a wave of negative online reviews, highlighting the challenges faced when integrating LGBTQ+ narratives into established franchises. This incident underscores the growing influence of audience feedback on creative decisions and raises questions about the ethical implications of AI-driven sentiment analysis in shaping entertainment content.
Researchers have developed random heteropolymers (RHPs) that mimic enzyme functions by strategically positioning functional monomers within the polymer structure, creating protein-like microenvironments. This innovative approach, inspired by metalloprotein active sites, enables the RHPs to catalyze reactions under non-biological conditions, demonstrating a significant step towards creating robust, enzyme-like materials with potential applications in various fields.
Researchers have created a novel "chiral fermionic valve" using the quantum geometry of topological bands in a non-magnetic material, PdGa. This device spatially separates chiral fermions with opposite Chern numbers, enabling quantum interference and demonstrating a new approach to controlling chiral transport without magnetic fields.
In 2026, expect to see the rise of smaller, more efficient AI models challenging the dominance of Large Language Models, alongside advancements in gene editing therapies for rare diseases. A mission to collect samples from Phobos and the impact of US policy changes on the scientific community are also key events to watch.
Discussion
Join the conversation
Be the first to comment