National Bank of Canada strategists Stéfane Marion and Kyle Dahms expect the US Dollar to maintain its strength through the end of 2026. Persistent inflation and the potential for further Federal Reserve tightening following October's pause are primary drivers, alongside safe-haven demand fueled by declining global risk appetite.
Bullish
🤖 60%
National Bank of Canada strategists expect the Dollar to stay supported through year-end on persistent inflation, the prospect of further Fed tightening after October's pause, and safe-haven demand from weaker global risk appetite. The bullish case is front-loaded, as they see the Dollar weakening gradually next year once relative-rate support peaks.
Catalysts
- ▲ Expectation of tighter Fed policy before year-end after October's pause
- ▲ Another firm CPI report reinforcing tighter-policy expectations
Risk Factors
- ▼ Strategists see midterm elections as a medium-term headwind for the Dollar
- ▼ Dollar expected to weaken gradually in the next year as relative-rate support peaks