US Dollar Forecast 2026: USD Prediction and Outlook for the Next 6 Months

This is Cambridge Currencies’ view on the dollar for the next six months, refreshed on 8 November 2026 after the October US jobs report released on 6 November. The Federal Reserve held at 3.75–4.00% on 28 October with two members voting for a rise, and the Bank of England raised Bank Rate to 4% on 5 November. For the calendar year ahead, see our separate US dollar forecast for 2027.

US dollar forecast 2026 at a glance

The 6 November fixings were struck before the 13:30 UK payrolls release, so they do not capture the reaction to the jobs data.

Will the US dollar go up or down in 2026?

The balance of risks to the end of 2026 has tilted towards a firmer dollar. October payrolls rose 165,000 against a reported consensus of about 65,000, August and September were revised up by a combined 84,000, and unemployment fell to 4.1%, according to the Bureau of Labor Statistics. That strengthens the case for the further quarter-point rise the Fed’s September projections already implied.

A dollar forecast is a forecast of US rates relative to everyone else’s, so the ranges stay two-sided. The Bank of England has just raised to 4%, and euro area inflation of 4.0% keeps an ECB rise possible. A sustained dollar rally would need the Fed to tighten while both stand still.

USD forecast 2026: ranges to December and March 2027

Our September six-month range of 98–103 on the DXY and 1.11–1.19 on EUR/USD has not been broken, but it no longer reflects the balance of risks: we have moved the DXY range up to 99–105 and EUR/USD down to 1.07–1.16 after the payrolls beat and the euro area’s energy shock.

Is the US dollar getting stronger or weaker?

Stronger, gradually. On our calculation from ECB reference rates, using ICE’s published DXY formula, the index rose from 98.61 on 9 September to 100.98 on 25 September and about 101.58 on 5 November, a gain of about 3% since early September. Trading Economics reported the index at around 101.3–101.6 on 5 November.

The euro, which makes up 57.6% of the index, did most of the work: EUR/USD fell 1.6% from 1.1403 on 25 September to 1.1224 on 5 November, and to 1.1165 on 6 November. Against the pound the dollar weakened over the same period, because the Bank of England moved. Our US dollar index forecast covers the DXY in more detail.

Why did the Federal Reserve raise rates in September 2026?

The FOMC raised its target range by a quarter point to 3.75–4.00% on 16 September because the summer slowdown in hiring was revised away and its preferred inflation measure, PCE, was running well above CPI. On 28 October it held, saying “Inflation remains elevated” and “Economic activity is expanding at a strong pace”. Lisa Cook and Beth Hammack dissented in favour of a further 25 basis-point rise, per the Federal Reserve.

The data since has backed the hawks. Q3 GDP grew at an advance 3.4% annualised, September core PCE was 3.1% against core CPI of 2.6%, and October payrolls beat expectations by a wide margin. One offset: the University of Michigan’s preliminary November survey showed one-year inflation expectations easing to 4.3% from 4.7%, while sentiment rose to 51.0 from 48.0.

What do the Fed’s September projections mean for the dollar?

The Fed’s median projections put the federal funds rate at 4.1% at the end of 2026 and 4.1% at the end of 2027. From the 3.875% midpoint, that implies one more quarter-point rise this year and then a plateau, not a peak followed by cuts. The projections will be updated on 9 December.

If rates stay near 4.1% while inflation falls, real interest rates rise, which tends to support a currency.

US dollar forecast for the next 6 months: month-by-month ranges

The top of each DXY range reflects the Fed delivering a December rise while the ECB holds. The bottom reflects the ECB tightening into its 4.0% inflation reading while the Fed pauses. GBP/USD and EUR/USD broadly move the opposite way to the DXY.

Cambridge Currencies’ forecast ranges as at 8 November 2026, anchored on the 5 November ECB fixings. They are not guarantees, and rates may move outside them. The DXY is our calculation using ICE’s published formula applied to ECB reference rates.

The pound to dollar forecast covers GBP/USD in full, and the euro to dollar forecast covers EUR/USD. For the week ahead, see the weekly dollar forecast.

When will the US dollar go up again?

The dollar has already firmed against the euro since September, and the next scheduled tests are in December. These are the dates most likely to move it:

Markets price expected decisions before they happen, so by the time a change is announced the dollar has usually moved already. What moves the rate is the gap between what is priced and what is delivered.

Will the US dollar get stronger in 2026?

It could firm further, but a sustained move above the DXY 104 area would need the Fed to tighten while the ECB stands still.

Against the euro, the setting favours the dollar: the Fed midpoint sits 137.5 basis points above the ECB’s 2.50% deposit rate, and the ECB warned on 29 October that rising energy prices pose downside risks to growth. Against the pound it does not: Bank Rate at 4% is now 12.5 basis points above the Fed midpoint, reversing the gap the Fed opened in September.

The US midterm elections on 3 November gave Democrats control of both the House and the Senate, according to NBC, CBS and ABC projections, with the new Congress sitting from January 2027. For currency markets the relevant question is the outlook for fiscal policy under divided government, which may become a dollar factor in 2027 rather than this year.

GBP/USD forecast: what the Fed and Bank of England moves mean for the pound

The Bank of England raised Bank Rate from 3.75% to 4% on 5 November in an 8–1 vote, with Catherine Mann voting for 4.25%, and expects UK inflation to reach about 5% by mid-2027. GBP/USD fixed at 1.3459 that day and 1.3385 on 6 November, before payrolls. Check the live GBP to USD rate before acting on any figure here.

We expect GBP/USD between 1.32 and 1.37 to the end of December 2026 and between 1.30 and 1.38 to the end of March 2027. A December Fed rise without a matching UK move would push towards the bottom; a second Bank of England rise on 17 December would push towards the top. See the next Bank of England interest rate decision.

EUR/USD forecast: why the euro has slipped against the dollar

The ECB held its deposit rate at 2.50% on 29 October even as Eurostat’s flash estimate put October euro area inflation at 4.0%, driven by energy at 20.8%. Core inflation was steady at 2.5%, which gives the ECB reason to wait. An energy shock that lifts headline inflation while squeezing growth tends to weigh on the euro. We expect EUR/USD between 1.09 and 1.15 to the end of December and 1.07 and 1.16 to the end of March 2027.

Will the dollar go up against the Turkish lira, the rupee and other currencies?

Against several emerging-market currencies the dollar has risen far more in 2026 than against the pound or euro. These are the moves from 2 January to 5 November 2026, derived from ECB reference rates:

Currencies of countries with inflation well above US levels tend to lose ground to the dollar over time, which is the pattern behind the lira’s fall. We do not publish forecasts for the lira. For the rupee, see our USD to INR forecast.

What is the US dollar forecast for the next 5 years?

No forecaster produces a five-year exchange rate projection precise enough to plan a transfer around.

The dollar is the world’s dominant reserve currency, which limits how far and how fast it moves. Over multi-year periods it has tended to weaken when US real interest rates fall relative to the rest of the world, and to strengthen when they rise. Forward contracts run up to twelve months ahead, so a five-year plan is really a sequence of shorter ones.

Is the US dollar going to crash in 2026?

A crash is not a realistic base case. The Fed is debating whether to raise rates, not cut them, the US economy grew at 3.4% annualised in Q3, and the dollar index has risen since September. Our range to March 2027 is six points wide on the DXY, roughly 6%, and is tilted towards dollar strength rather than weakness.

What does the dollar forecast mean for your transfer?

On a large transfer, the dollar’s direction can matter more than the timing of a single day. Take an illustrative buyer converting sterling into $200,000:

Across our range to the end of December, the sterling cost of $200,000 varies by about £5,530. Across the wider 1.30–1.38 range to March 2027, it varies by about £8,920.

How to manage dollar risk before the December decisions

• Fix the rate. A forward contract locks a rate for a future date up to twelve months out. It removes the outcome from the equation, and the upside with it.
• Target a better rate. A market order executes automatically if the rate reaches a level you set.
• Split the amount. Converting in tranches either side of 9 and 17 December averages your rate rather than staking it all on one day.

Which fits depends on how firm your deadline is. Our guide on whether to buy US dollars now works through that decision.

Frequently asked questions

What is the US dollar forecast for the next 6 months?

Cambridge Currencies expects the dollar index to trade between 99 and 105 to the end of March 2027, with GBP/USD between 1.30 and 1.38 and EUR/USD between 1.07 and 1.16. Strong US jobs data and a Fed debating a further rise support the dollar; further ECB or Bank of England rises are the main risk to it.

What is the USD prediction for 2026?

For the rest of 2026 we expect the dollar index between 100 and 104, GBP/USD between 1.32 and 1.37 and EUR/USD between 1.09 and 1.15. On our calculation from ECB rates, the DXY was about 101.6 on 5 November.

Is the US dollar getting stronger?

Against the euro, yes: EUR/USD fell from 1.1403 on 25 September to 1.1165 on 6 November. The dollar index rose about 3% between 9 September and 5 November on our calculation. Against the pound it has eased since the Bank of England’s rise.

How did the October jobs report affect the dollar outlook?

Payrolls rose 165,000 in October, unemployment fell to 4.1% and the two previous months were revised up. Data this strong could make a December Fed rise more likely, which is why we have nudged our dollar ranges higher.

Will the dollar rate increase in the next few weeks?

It could, if the October CPI on 10 November and November payrolls on 4 December keep pointing to a Fed rise on 9 December. The ECB and Bank of England decide on 17 December. Our next Federal Reserve decision page tracks the Fed.

Will the Fed raise interest rates again in 2026?

It may. The Fed’s September median projects 4.1% at the end of 2026, which implies one more quarter-point rise, and two members already voted for one on 28 October. The only remaining 2026 meeting is on 8–9 December.

Why is US core PCE inflation higher than core CPI?

In September 2026, core PCE was 3.1% while core CPI was 2.6%. The two indices weight housing, healthcare and financial services differently. It matters for the dollar because the Fed’s 2% target is set against PCE.

Should I buy US dollars now or wait?

That depends on your deadline rather than the forecast. If you have a fixed commitment, a forward contract removes the uncertainty; if your timing is flexible, a market order or splitting the amount spreads the risk. A specialist can talk through which fits your situation.

Have a dollar payment landing around the December Fed, ECB and Bank of England decisions? Talk the timing through with a Cambridge Currencies specialist. Whether you are buying US property, paying a dollar invoice or repatriating proceeds, request a free quote. Every transfer is handled by phone with a dedicated specialist, from a minimum of £5,000. Cambridge Currencies works with FCA-authorised payment partners Currencycloud (FRN 900199) and ScioPay (FRN 927951), and client funds are safeguarded. See all our currency forecasts.