BENGALURU- The dollar’s weakness will continue for at least another three months, according to a Reuters poll of foreign exchange strategists, a majority of whom said a hunt for yield would dictate moves in currency markets in the near term.
After gaining nearly 4 percent in the first quarter, marking its best start in years, the dollar index – measured against a basket of six major currencies – fell more than 2 percent in April, its weakest performance in four months.
Despite the greenback’s rebound in recent trading sessions, partly sparked by comments from US Treasury Secretary Janet Yellen that interest rate hikes may be needed to stop the economy from overheating, the currency was not expected to make a sustained recovery.
The May 3-5 Reuters poll of more than 60 foreign exchange strategists showed the dollar was expected to underperform against most major currencies over the coming year as investors and traders who had earlier sought shelter in US Treasuries look beyond safety and shift their focus to returns.
More than 70 percent of analysts, or 28 of 38, who responded to an additional question said the greenback’s weakness would last more than three months, including 15 who expected it to continue for more than six months.– Reuters
