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
Related speeches
4 itemsGlobal FX: Sailing the USD Bearish Ship in Murky Waters
The desk is advocating for a bearish outlook on the USD amidst a backdrop of geopolitical tensions and limited data visibility due to the US government shutdown. Per the full note [source], the commentary highlights the fragility of global growth momentum and the potential for heightened credit risks, particularly in the context of US-China relations. This bearish sentiment is supported by recent trends in currency positioning and market reactions to the ongoing uncertainty. Our consensus target for the USD is set at 1.075, with a range reflecting diverging views among major firms.
2026 market outlook: A multidimensional polarization - J.P. Morgan
J.P. Morgan's 2026 market outlook emphasizes a multidimensional polarization, suggesting an evolving landscape in the FX market as economic conditions diverge within major economies. The firm anticipates that different regions will face varying monetary policies and inflationary pressures, which will inevitably create divergent paths for exchange rates.
Global FX and Commodities: The bullish case for gold, the bearish case for USD ex-yen and the shutdown showdown
The desk posits a bullish outlook for gold while adopting a bearish stance on the USD, excluding the yen, amid ongoing political uncertainties in the U.S. and Japan. Per the full note [source], the commentary highlights the cyclical nature of FX markets and the implications of potential government shutdowns on currency valuations. With gold's appeal likely to strengthen as a safe haven, the desk anticipates a shift in positioning that could favor non-USD currencies. The commentary also revisits the yen's prospects in light of recent political developments, suggesting a nuanced approach to Japanese monetary policy.
EM Fixed Income: All the small things
Lead — The desk emphasizes a cautious yet optimistic outlook on emerging market (EM) fixed income, highlighting recent market developments that suggest a potential for stabilization and growth. Per the full note [source], the discussion among J.P. Morgan's analysts indicates that despite global economic uncertainties, certain EM assets are showing resilience, particularly in light of recent policy shifts. The desk notes that positioning in EM fixed income is becoming more favorable as investors seek yield in a low-rate environment, with a consensus target of 1.075 for the asset class. This outlook is supported by a lack of significant upcoming economic events that could disrupt the current trend.
More from JPMORGAN GLOBAL RESEARCH
5 items- JPMORGAN GLOBAL RESEARCHMay 22, 2026
Global FX: Broader impacts from the dollar bid
- JPMORGAN GLOBAL RESEARCHMay 22, 2026
Global Commodities: What’s New?
- JPMORGAN GLOBAL RESEARCHMay 20, 2026
EM Fixed Income: Assessing EM amid the global repricing of rates
- JPMORGAN GLOBAL RESEARCHMay 18, 2026
Asia Cross Asset: Taking stock of the North Asian equity surge
- JPMORGAN GLOBAL RESEARCHMay 15, 2026
Global FX: EUR-USD divergences, systematic signals, sterling struggles