The US dollar has shown steady growth in the second half of 2026, becoming the best-performing currency among the world’s leading economies. This strengthening is being driven by a record inflow of investment and expectations of interest rate rises in the US.
- The dollar was the best-performing currency in the first half of 2026.
- The US attracted a record $341 billion in investment into the stock market.
- The strengthening of the dollar is putting pressure on the euro and the yen.
- Investors are expecting the Federal Reserve to raise interest rates further.
The dollar has regained its status as the world’s leading currency
Following a record fall in the first half of 2025, the US dollar completely reversed its trend. By mid-2026, the dollar had risen by approximately 3%, becoming the best-performing currency among the world’s leading economies. Financial markets are increasingly convinced that the US Federal Reserve may raise its base interest rate once or even twice more by the end of the year.
The US economy is attracting record levels of investment
One of the main reasons the strengthening of the dollar Investor confidence in the US economy remains high. According to estimates by Bank of America, around $341 billion in new investment has flowed into the US stock market since the start of the year — an all-time record. At the same time, the US remains the global hub for the development of artificial intelligence, data centre construction and quantum technologies, which further boosts interest from international capital.
Other currencies came under pressure
The strengthening of the dollar is already causing problems for many of the world’s economies. The Japanese yen is trading near its lowest levels in decades, whilst the euro is at risk of falling back to the $1.10 mark. Developing countries are being forced to prop up their own currencies by raising interest rates or carrying out currency interventions to stem capital outflows.
Why are investors continuing to buy the dollar?
Analysts attribute the current situation to the «American exceptionalism» effect. It is the US that currently combines strong economic growth, large-scale investment in technology, high corporate profits and a tighter monetary policy. According to experts, as long as the US economy continues to outperform most of its competitors, global investors will continue to favour the dollar and US assets.
