ANZ Research discusses its USD outlook through the end of the year.

"Positioning reinforces the case for caution. USD longs remain extended, leaving the market vulnerable to further liquidation if US data soften or rate support continues to erode. This is not a one-way USD bear case. US growth is still resilient, real yields remain elevated and medium-term support from energy exports and technology investment is intact. But the relative story is shifting as growth and policy differentials narrow, lifting the hurdle for renewed USD upside," ANZ notes.

"Our base case is for the USD to trade with a softer bias through the remainder of 2026. A less hawkish Fed interpretation, weaker marginal support from US rates and higher fiscal risk premia. Our year-end DXY forecast is 99, with risks skewed lower if the upcoming US mid-term elections in November lift policy uncertainty," ANZ adds.