Dollar Anticipated to Weaken Amid Economic Slowdown

According to BlockBeats, Pictet Asset Management strategist Luca Paolini has indicated that the U.S. dollar is expected to face a new wave of weakness next year as economic growth slows, paving the way for further interest rate cuts by the Federal Reserve. Paolini highlighted that the interest rate differential for the dollar is narrowing significantly. He stated, "We anticipate the U.S. economy will become slightly weaker, which will gradually alleviate inflationary pressures." In contrast, economic growth in other parts of the world, particularly Europe and Japan, may improve. Additionally, the dollar remains overvalued. Pictet forecasts that by the end of 2026, the dollar index will decline from its current level of around 99.55 to 95.