According to the majority of strategists in a Reuters poll, the dollar's weakness is still ongoing, with predictions that the currency will stay in flat or bearish territory for the next 3 months, suggesting that the recent strength of the USD is only momentary.

After the sell-off that started last year, the dollar has rallied in the last 4/5 weeks, regaining 1% of its value as traders consider the big bets against the coin.

However, in a Reuters survey of more than 70 professional analysts on the first four days of February, experts kept their predictions for a weakening dollar this year and were mostly unchanged from the outlook. points in January.

Over 85%, or 63/73 analysts, expect the dollar to stay around current levels or decline over the next three months. Only 10 people expect it to rise from current levels.

Steve Englander, head of G10 forex research and North American macro strategy at Standard Chartered (OTC: SCBFF), said: “The USD is having a lot of downsides, and their long-term view. My opinion of this coin is that it will weaken, not strengthen! The expectations that investors made at the beginning of this year have skewed that to some extent, but we think this is only temporary.”


Reuters poll on the outlook for the US dollar in the near term 

Reflecting that outlook, the latest Commodity Futures Trading Commission (CFTC) speculative positions data shows investors are still betting against the dollar, even though they have cut some of their positions. short position last week from the biggest (bearish) level in nearly 10 years the week before.

When asked about the speculative position in the USD at the end of February, just over a quarter (29/55) of the analysts said that the speculative position against the USD could stay at current levels or increase, 24 people, forecast a reduction in short positions while only 2 forecasts a reversal to net long positions.

“The current net short positions are at the extreme, making it harder to move up from here,” said David Alexander Meier, an economist at Julius Baer. But we also see little reason to expect a sharp reversal in the coming weeks.”

Despite the continued rally in risk assets, the dollar, which normally moves in the opposite direction, strengthened as investors turned their focus to the growing gap in strength comparisons. economic recovery and speed of vaccine deployment in the US and Europe.

Compare the year-on-year performance of the US dollar and the S&P 500 Index 

However, the euro, which has lost more than 1.5% on the year and is trading near a nine-week low against the dollar on Thursday, is forecast to make up for all those losses and rise more. 4% over the next 12 months.

The euro is expected to rise to $1.23 in six months and to $1.25 in a year.

The driving force for this is the Fed's worries about the speed of economic recovery, making it possible for the Fed to maintain the current loose monetary policy for a longer time.

“EURUSD didn’t go up to 1.24 because the EU suddenly got better, it went up because of the Fed,” said Kit Juckes, head of FX strategy at Societe Generale (OTC: SCGLY).

And not only that, but the USD is also forecasted to weaken against emerging market currencies in the near future.

Steve Englander of Standard Chartered said that the USD is no longer scarce, the Fed will be forced to provide liquidity because they know what will happen if they allow long-term interest rates to rise. Therefore, USD will continue to come under downward pressure.