US dollar set for sharp late-December slide as DXY weekly loss nears June low

At the end of December 2025, the US dollar is heading for its steepest weekly decline since June, with the DXY Index down 0.8% and the currency on track for an 8% annual drop. Investors are positioning for further Federal Reserve rate cuts in 2026 while 10-year Treasury yields hover near 4.12%. Equities have rallied in parallel, with the S&P 500, Dow and Nasdaq all posting gains, as a seasonal Santa Claus rally and expectations of lower borrowing costs support risk assets.