Multiple institutions have warned that the U.S. dollar may face a "triple threat" in the coming weeks, potentially exacerbating its seasonal weakness. Standard Bank of South Africa highlighted three key factors that could pressure the currency: a potential U.S. Supreme Court ruling declaring tariffs illegal, the possible appointment of White House National Economic Council Director Kevin Hassett as the next Federal Reserve Chair, and a stronger yen if the Bank of Japan raises rates this month.

Steven Barrow, Head of G10 FX Strategy at Standard Bank, stated, "An adverse tariff ruling combined with Hassett leading the Fed and a Japanese rate hike could deliver a triple blow to the dollar. Even if not in the remaining weeks of this year, it’s almost certain to materialize by early 2026."

As year-end FX trading thins, market liquidity typically declines as investors unwind positions before establishing new ones in the new year. Barrow added that despite subdued seasonal activity, "it would be incredible to assume that a ruling against Trump’s tariff policies—a cornerstone of his agenda—would have little impact on the dollar."

Deutsche Bank also noted that the Bank of Japan has room to hike rates, while stronger economic data elsewhere could further weaken the dollar. Macro strategist Tim Baker pointed out that December has historically been the dollar’s worst-performing month over the past decade, as traders often sell the currency to rebalance gains from other U.S. assets. He added that potential BOJ tightening and positive economic surprises abroad could trigger a reversal in dollar buying this month.

The dollar index has risen 1.5% this quarter, building on its nearly 1% gain in Q3 when it rebounded from three-year lows. However, Baker cautioned, "We see scope for the dollar to retreat toward Q3 lows, roughly 2% below current levels."

Another pressure point stems from speculation over the next Fed chair. President Trump has hinted at appointing Hassett, whose perceived dovish stance could reinforce expectations of rate cuts in 2024. Van Luu, Global Head of FX at Russell Investments, noted, "Markets view Hassett’s potential leadership as tilting the Fed toward more accommodative policy," adding that his appointment might push the euro above $1.19—a four-year low for the dollar.

Both Standard Bank and Deutsche Bank observed that historical precedents suggest Japanese rate hikes often trigger significant yen appreciation, particularly against the dollar. Markets now price an 80% chance of a 25-basis-point BOJ hike this month after the central bank issued its clearest tightening signal to date on Monday.