Read our new report FX themes for 2026, analysing how evolving monetary policy, fiscal risk, geopolitics and AI investment cycles are likely to shape currency markets in the year ahead.

Key points
  • Throughout 2025, certain key themes emerged that are likely to persist into 2026 and will have far-reaching consequences for many markets, including FX. The following article aims to explore some of the key themes and examine influential drivers that contribute to FX market movements, and then provide a perspective on the balance of bias, primarily regarding the USD, as well as other majors and emerging market currencies.
  • Five major themes have been identified, and although most of them are not new, they are evolving themes that require constant monitoring. It is by no means an exhaustive list, and many other themes might be considered influential enough to be analysed and assessed.
  • However, there is a common thread which relates to the potential erosion of the value of the USD. Whether it be the shifts in the BoJ’s monetary policy that discourage carry trades into USDs, or the shifts in geopolitics that have resulted in major economies diversifying their reserves away from USDs, or the fiscal risks that the US might face if Trump’s tariff policies are overturned, the USD stands to come under pressure.

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