The US dollar's performance this year has been quite interesting — it has reversed its previous upward trend. According to Wall Street data, the dollar has fallen nearly 7%, marking the largest annual decline since 2017.

The euro against the dollar has performed even better, rising over 13%, which is also one of the best results in recent years. The British pound hasn't been idle either, increasing about 8%, also marking the largest gain since 2017.

Why is this happening? Policy uncertainty is a major reason, causing US dollar investors to reconsider their positions. Overseas funds are beginning to hedge against dollar assets, and concerns about debt sustainability along with expectations of rate cuts are also putting pressure on the dollar.

Looking ahead to 2026, Wall Street's forecasts are even more interesting — the dollar may continue to be under pressure. Goldman Sachs analysts believe that over the next 12 months, the dollar will depreciate by an average of 2.8% against major global currencies. As Germany increases spending on infrastructure and defense, the euro against the dollar could even rise another 6.6%. This is a signal that those holding dollar assets and involved in cross-asset allocation should take seriously.