Analysts Expect US Dollar Rebound to Fade as Appeal Erodes
Strategists expect the dollar rebound to fade as safe-haven appeal weakens. Analysts predict the euro will rise to 1.20 dollars within a year as risks ease.
The modest rebound of the United States dollar following the escalation of conflict between Israel and Iran is expected to dissipate as its safe-haven appeal diminishes. According to a Reuters poll of nearly 70 currency strategists, the greenback is likely to weaken in the coming months, maintaining a long-held bearish outlook among market experts. While the currency has risen approximately 2% against a basket of major peers since the conflict began, analysts suggest this movement was primarily driven by short-covering rather than a flight to safety.
Traditional safe-haven assets have shown unusual behavior during this period. Gold has declined by more than 10%, and Treasury yields have moved significantly higher. The dollar's status is further complicated by domestic concerns, including uncertainties surrounding trade policy and the independence of the Federal Reserve. These factors, combined with a rising risk premium that has dampened expectations for interest rate cuts, have weighed on riskier assets while providing only limited support to the dollar.
