Via Reuters :
- USD dollar strength to continue for more than six months, say majority of analysts
and then, further out:
- Euro to gain about 4% vs dollar to $1.17 in a year ($1.18 in the previous, May, poll)
Some of the remarks from analysts:
"For now the Fed may refrain - to the benefit of the dollar - from signaling it is preparing to cut interest rates if U.S. economic data continues to hold up over the summer," said Mansoor Mohi-uddin, senior macro strategist at NatWest Markets. "Beyond the summer, however, the prospects of the Fed staying on hold to the benefit of the dollar may be receding."
"We think some developments are now starting to move against the dollar ... with expectations that the Fed may need to deliver rate cuts over the next six to 12 months," said Lee Hardman, currency economist at MUFG. "Yield spreads are now starting to move against the dollar and we just think that kind of dynamic, if sustained going forward, should start to erode some of the appeal of the dollar".
"So far, the change in both Fed rhetoric and - even more strikingly - in market expectations, really hasn't done that much to undermine the dollar," noted Kit Juckes, chief global FX strategist at Societe Generale. "If the equity bounce and mood improvement in markets lasts, maybe that can continue, but I think the improvement is short-lived, the currency will come under more and more scrutiny."
"I think it is the dollar that is the going to be the asset of choice for many investors now in terms of safe haven," said Jane Foley, head of FX strategy at Rabobank. "The yen will remain the safe haven when things turn really sour, particularly when there is geopolitical risk, but investors have an issue with the yen, and that is there is no yield ... I think that factor throws many people back into the dollar."
