US Dollar Gets Powerful Boost From AI Boom. Forecast as of 26.06.2026

2026.06.26 2026.06.26
US Dollar Gets Powerful Boost From AI Boom. Forecast as of 26.06.2026Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/American exceptionalism is returning to the markets. The US economy is expected to gain momentum as productivity gains driven by advances in AI accelerate. Let’s discuss this topic and develop a trading plan for the EUR/USD pair.The article covers the following subjects:Major TakeawaysCentral banks are lagging behind the Fed.American exceptionalism has returned to the market.Speculators are buying the US dollar.Long trades on the EUR/USD pair can be considered above 1.1385.Weekly Fundamental Forecast for DollarThe shift from geopolitics to monetary policy has provided a powerful boost to the US dollar. The Fed has signaled that it plans to bring inflation back to the target; the futures market expects a federal funds rate hike as early as September; the bond yield spread is widening; and other central banks are unlikely to keep pace. As a result, the EUR/USD pair has plummeted to yearly lows, and speculators continue to build up long positions in the greenback.Along with expectations of Fed rate hikes, American exceptionalism is returning to the markets. Strong momentum in US PMIs, an upward revision to the final first-quarter GDP estimate, and an acceleration in the PCE index to its highest level since 2023 all point to the strength of the US economy. Furthermore, investors are confident that the US will be the primary beneficiary of AI technology. As a result, speculators have increased their net long positions in the US dollar to their highest levels since February 2025.Speculative Positions on US DollarSource: Bloomberg.New technological advances can indeed boost the economy through productivity gains. However, as history shows, they tend to accelerate inflation during the initial phase of adoption. John Williams expressed concern about this. The New York Fed President noted that monetary policy was well-positioned. Current interest rates can bring inflation down to 2% in the medium term. However, an investment boom in artificial intelligence could push prices higher. The same is true for the consequences of supply disruptions caused by the conflict in the Middle East.The fallout from the conflict continues. Iran attacked one of the tankers passing through the Strait of Hormuz, citing an allegedly unauthorized route. It was the first attack since June 12. It triggered a rise in Brent prices. Although the US tried to downplay the situation, stating that no one was injured and that traffic through the world’s key oil route continues.However, chances of another escalation are slim. Moreover, a new driver of the US dollar’s strength is unlikely to be a game-changer. Given that annual reversal risks have returned to their 5-year average levels, the greenback has enough momentum and current advantages to sustain its strength.US Dollar Risk ReversalsSource: Bloomberg.That said, the markets are gradually coming to their senses and realizing that they were running ahead of themselves. Slower month-over-month PCE growth allowed FOMC hawk Austan Goolsbee to say the report showed encouraging signs of a slowdown in inflation. The futures market has reduced the odds of two Fed rate hikes in 2026 from 50% to 36% over the past two days. The probability of a September rate hike has fallen from 71% to 58%. This allowed the euro to stabilize.Weekly Trading Plan for EUR/USDIn such conditions, long positions can be considered if the EUR/USD pair breaks through 1.1385.This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.Price chart of EURUSD in real time modeThe content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.

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