Dollar seen firm over coming months but weaker in a year, Reuters poll finds

  • The U.S. dollar reached a two-week high despite strategists' weaker-dollar outlook.
  • 34 of 66 strategists saw greater risk of dollar weakness than strength within three months.
  • Euro targets were $1.16, $1.17 and $1.18 over three, six and 12 months.

The U.S. dollar has climbed to a two-week high, but currency strategists still expect its strength to fade over the next year, according to a Reuters poll conducted from Aug. 31 to Sept. 2. The euro was forecast at $1.16 in three months, $1.17 in six months and $1.18 in a year, with the three- and six-month projections each raised by one cent from August. The Dollar Index approached 99.8 as renewed U.S.-Iran fighting boosted safe-haven demand and oil prices, while the euro slipped toward $1.1565. Futures markets price two Federal Reserve rate hikes this year and the 10-year Treasury yield briefly reached about 4.82%, but strategists including Vincent Reinhart of BNY Investments and Dan Tobon of Citi questioned whether the Fed will tighten as aggressively as markets expect. Bitcoin recently fell below $77,000 as higher yields and a hawkish message from Fed Chair Kevin Warsh strengthened the dollar. Geopolitical escalation remains a risk to the weaker-dollar outlook, while net long dollar positions have declined from an 11-year high.

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