Dollar May Hold Firm in Short Term, Weaken Over Next Year: Reuters Poll

The US dollar is expected to maintain its current strength over the coming months but may trade weaker in a year, according to a Reuters poll of FX strategists.

Despite some volatility, forecasters are not revising their calls for the dollar to weaken, with medians from the August 31 to September 2 poll showing the euro holding at its current $1.16-level in three months and $1.17 in six months.

Currency strategists attribute this stability to sparse policy guidance from Federal Reserve Chair Kevin Warsh, who has given relatively hawkish remarks in recent weeks.

Interest rate futures are currently betting on two Fed hikes this year to tame inflation, which is near the 2% target. However, currency forecasters remain cautious, with some predicting that the dollar may trade weaker than expected due to factors like military conflict and Treasury Secretary Scott Bessent's surprise announcement of unscheduled long-dated bond purchases.