Dollar Strength Continues Amid Bets for Higher US Rates and Geopolitical Tension

The U.S. dollar is entering the second half of 2026 as the best-performing currency, driven by expectations of higher U.S. interest rates and strong investor demand for U.S. assets. This strength, further bolstered by geopolitical tension, is causing pain for other currencies, with the yen at near 40-year lows and other nations grappling with weaker currencies and rising import bills.