Outlook 2026: Currency markets are expected to be calmer compared to 2025

Foreign Exchange Markets: A Calmer Outlook for 2026

In the previous year, events such as the ill-fated Mar-a-Lago Accord and the US Liberation Day led to significant upheaval and a notable decline in the dollar across global currency markets. However, as both the Federal Reserve and the European Central Bank near the conclusion of their interest rate reduction cycles, the foreign exchange landscape is expected to be much more stable in 2026.

Although forecasting currency movements remains notoriously unreliable, it continues to fuel a thriving industry where analysts boldly present precise numerical predictions—despite the inherent uncertainty. In this context, here are six key insights into what may shape the foreign exchange environment in the coming year.