A survey by Reuters of currency experts shows that most of them agree the dollar will lose ground in 2023.
Even though the dollar had a slow start to the year, it gained about 3% in February because people thought the Federal Reserve would raise interest rates even more.
Due to the collapse of two regional banks in the United States in March, the Federal Reserve rethought its aggressive attitude, leading to a decline in the value of the dollar.
Even though the market is less worried about the banking crisis, the Fed is still talking about aggressive interest rate hikes. This suggests that quick rate hikes and the U.S. dollar’s bull run are coming to an end.
In a survey taken from March 31 to April 4, 90 currency strategists said that the dollar would lose ground against all major currencies within a year.
Thirty-two of the fifty-six analysts who answered a different question said that interest rate differences will be the main thing that affects the value of the dollar in the next month.
Fed funds futures showed that markets were pricing in a rate cut as soon as September, even though inflation was still well over double the Fed’s goal.
In 2022, the euro briefly fell below parity with the dollar because rate predictions were behind and the currency was expected to fall.
The European single currency (Dollar’s) is up 2.5% this year and is expected to trade at $1.09 for the next one to three months before getting stronger by another 2% and trading at $1.12 for the next 12 months.
Even though the Japanese yen went up by more than 2.5% in March, its annual drop was 0.6%. After falling to 32-year lows in 2022 because of differences in interest rates, the safe-haven currency was expected to make up for lost ground by the end of the forecast period.
Most people thought that within a year, the yen would rise in value by more than 6%, to around 125.00 U.S. dollars per yen.
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