Dollar to Hold Firm as Strategists Downplay Yen Intervention

The US dollar is expected to maintain its strength in coming months before eventually weakening later this year. According to FX strategists surveyed by Reuters, nearly 95% of respondents believe that future Japanese currency interventions alone will not sustainably curb the yen's weakness.

Around 60 respondents were polled between July 31 and August 5, with most agreeing that a lasting impact would require the Bank of Japan (BoJ) to raise interest rates. The BoJ has been hesitant to increase borrowing costs due to a weak economy, but interest rate futures now show another rate rise in October.

The US dollar's strength is attributed to the country's performing well economically, which may lead to higher interest rates being necessary to contain inflation pressures. This means that the 2% rise in the dollar so far this year may persist for a while.