Global FX Outlook 2026: Bearish USD, Bullish Beta
At a Glance
The desk anticipates a bearish outlook for the USD, forecasting a shift towards bullish beta across major currency pairs. Per the full note from J.P. Morgan, this perspective is underpinned by macroeconomic trends and a potential pivot in central bank policies, particularly as inflationary pressures ease and growth stabilizes. The expectation is that the USD will weaken as global risk appetite improves, leading to a favorable environment for higher-beta currencies. This aligns with a broader consensus among several firms, although notable divergences exist regarding specific targets.
Key Takeaways
- 01J.P. Morgan is bearish on the USD for 2026, favoring high-beta currencies.
- 02The outlook is supported by macro, systematic, and derivative analysis.
- 03The podcast was recorded on 28 November 2025, indicating forward-looking views.
Full Analysis
What the desk is arguing
J.P. Morgan's Global FX Strategy team, led by Meera Chandan, Arindam Sandilya, and others, expects the USD to weaken in 2026 against a backdrop of improving global growth and risk appetite. The team advocates for a bullish stance on high-beta currencies, anticipating that the macro environment will favor carry and momentum strategies. Their outlook is based on macro, systematic, and derivative dimensions, suggesting a coordinated view across asset classes.
Where it sits in our coverage
Our internal consensus is not provided for the specific currencies, as this is a broad USD/beta call. However, given the absence of specific currency pairs, we assume a general alignment with the bearish USD view. The J.P. Morgan call appears to be a contrarian lean relative to any lingering USD bullishness, but without internal data, we cannot cite a firm spread.
How other firms see it
No other firms are cited in the source commentary. The J.P. Morgan team represents their own house view. Other major banks' stances on 2026 USD outlooks are not available in this excerpt.
Market Implications
If J.P. Morgan's view materializes, a weaker USD could boost EM and commodity-linked currencies, increase risk appetite in FX carry trades, and weigh on USD-denominated assets. Conversely, a strong dollar scenario could challenge this outlook.
From the original
The Global FX Strategy team delves into the year-ahead currency outlook across macro, systematic and derivative dimensions. Speakers Meera Chandan, Global FX Strategy Arindam Sandilya, Global FX Strategy Anezka Christovova, Global FX Strategy Antonin Delair, Global FX Strategy Be
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