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Dollar seen modestly stronger in Q3 before turning range-bound in 2026

TD Securities projects a roughly 2% Dollar decline in the second half of 2026, citing an extended Fed hold and limited sustained USD upside.

Reported · Written up by our desk · Major Pairs

TD Securities strategists expect the US Dollar to post modest gains in Q3 2026, supported by room for positioning to rebuild.

They see limited sustained upside thereafter, with the Dollar likely reverting toward a more traditional safe haven profile and a range-bound spot trend rather than a breakout move.

The firm forecasts about a 2% Dollar decline in the second half of 2026, attributing the outlook to expectations that the Fed remains on an extended hold and that any Fed hiking would likely be accompanied by tightening from other central banks.

TD Securities also argues that USD upside in 2026 could be capped by the lack of a clear spot trend breakout, along with assumptions that markets will eventually price out rate hikes for the year.

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