This year, the US dollar may set a less-than-glorious record—marking the weakest annual performance since 2017.

The analysis team at Mitsubishi UFJ Financial Group recently made a sobering prediction: the US dollar index is expected to fall by 9.3% this year. Interestingly, the dollar also performed poorly in 2017, during the early days of Trump's presidency. Although the dollar rebounded by 4.4% in 2018, analysts believe that the current and next year are unlikely to follow this historical pattern—due to even more concerning reasons.

In simple terms, it's a matter of interest rate differentials. The Federal Reserve is still in a rate-cutting cycle, while major central banks like the ECB and BOJ have basically already stopped easing. As a result, the dollar's interest advantage has been squeezed significantly, reducing the appeal of holding USD. From a trading perspective, narrowing interest rate spreads mean the dollar faces long-term depreciation pressure.

For traders holding crypto assets, this environment is worth paying attention to. A weakening dollar often correlates with ample liquidity, and during such periods, crypto markets tend to attract more risk appetite capital. The question is, how long can this dollar weakness last? Will there be a reversal next year? What are your thoughts?