Dollar's Strength Not a Comeback, Bearish Outlook Remains

The dollar's recent strength is not a sign of a comeback, according to FXStreet. ING now favors a September Fed rate hike, which would boost the dollar in the near term.

This shift in view does not change the broader bearish dollar outlook, but rather delays it.

The EUR/USD pair is expected to end the year at 1.16, down from the previous forecast of 1.18.

A key factor in this revised forecast is the US yield curve, which is flattening and typically supports the dollar.

However, it's not a straightforward situation, as the Fed is not expected to embark on a significant tightening cycle anytime soon.