Dollar Expected to Hold Firm Amid Repricing and Conflict Risks
A Reuters poll of FX strategists shows that the U.S. dollar will maintain its strength in the coming months, but trade weaker in a year's time.
The survey reveals that interest rate futures are currently betting on two Federal Reserve rate hikes this year to combat inflation, which is near twice the Fed's 2% target.
Despite some uncertainty following recent military conflict between the U.S. and Iran, and last week's hawkish comments from Fed Chair Kevin Warsh, forecasters' predictions for dollar weakness have barely shifted since August.
Currency strategists are split on what will drive markets over the next couple of months, with some focusing on repricing for the Fed's interest rate decisions and others looking at potential conflict escalation.