Societe Generale Forecasts Strong Dollar Through Mid-2026

French bank Societe Generale anticipates a sustained strong dollar through the latter half of 2026. The bank's analysis points to continued robust growth in the U.S. economy, which is expected to support high interest rates. This economic outlook suggests the U.S. Federal Reserve may face less pressure to cut rates, thereby maintaining a high-interest-rate environment that benefits the dollar.

In line with this forecast, Societe Generale projects the DXY dollar index to climb to 103.6 by the end of the year. The bank also predicts a weakening of the Euro against the dollar, with the Euro/dollar parity potentially falling to 1.11 by year-end. The strong economic activity in the U.S. could keep inflation above the target level, further reducing the impetus for the Federal Reserve to lower interest rates.

This sustained high-interest-rate environment is expected to bolster the dollar's value in global markets. The bank's assessment highlights the resilience of the U.S. economy as a key driver for currency strength, influencing major currency pairs and overall market dynamics.