Dollar to stay bright this year before fading in 2024, poll of analysts shows: Poll

BENGALURU (Reuters) – A Reuters survey of foreign exchange strategists said a stronger dollar will be difficult to overcome for most major currencies by the end of the year, with risks to the U.S. dollar outlook skewed to the upside. It was shown that there is.

The dollar has remained resilient against most major currencies despite temporary declines on the back of a strong economy and rising US Treasury yields, the highest in the developed world.

Safe-haven dollar hits six-month high as fears over China and global growth weigh on risk appetite and expectations that the Fed will hold interest rates longer It has recovered almost all of its losses and is now rising. 1% per year.

The strong performance has reconsidered the long-held view that the dollar will weaken in the short to medium term.

A Reuters poll from Sept. 1-6 showed that 81% of analysts responding to additional questions, or 43 of 53, said risks to the dollar outlook were to the upside.

“The dollar will continue to strengthen and will sustain itself over the next three months,” said Jane Foley, head of FX strategy at Rabobank.

However, the median of about 70 forex strategists expect the dollar to weaken slightly against most major currencies over the next year, with most expected next year as the Fed’s first rate cut approaches. It is

“We expect the Fed to start cutting rates in the next six to nine months, at which point the dollar will fall again,” said Lee Hardman, senior currency analyst at MUFG.

The euro rose just 0.13% for the year as growth prospects deteriorated, but it is expected to trade at $1.09, up 1.7% over the three-month period, almost unchanged from the August survey. was not

It was expected to rise 2.7% to $1.10 and 4.6% to $1.12 in six and 12 months, respectively.

The Japanese yen has already fallen more than 11% against the dollar since the beginning of the year, trading at 147 yen to the dollar on Wednesday, but it will take all of this year’s losses and change to 132 yen to the dollar over the next 12 months. is expected.

The pound has already risen nearly 3.5% in 2023 and was expected to rise another 3% to $1.29 a year later.

Other Asian currencies may face significant friction in recouping losses this year, according to polls. Nearly everything was expected to remain range-bound or slightly higher against the dollar over the next few months.

In Latin America, the Brazilian real and Mexican peso have risen about 6% and 12% respectively against the dollar, but were expected to fall only marginally by the end of the year.

But the Argentine peso, which has fallen 50% over the year, is headed for another significant devaluation and could drop another 17% by the end of November, polls show.

(This article has been amended to correct the pound notation in Section 12 from $1.29 to $1.29 per dollar)

(More coverage of the September Reuters Forex Survey here 🙂

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