{"id":120848,"date":"2021-09-03T01:53:43","date_gmt":"2021-09-03T01:53:43","guid":{"rendered":"https:\/\/fin2me.com\/?p=120848"},"modified":"2021-09-03T01:53:43","modified_gmt":"2021-09-03T01:53:43","slug":"dollar-lost-for-direction-awaiting-fed-to-set-its-path-reuters-poll","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/dollar-lost-for-direction-awaiting-fed-to-set-its-path-reuters-poll\/","title":{"rendered":"Dollar lost for direction awaiting Fed to set its path: Reuters poll"},"content":{"rendered":"

BENGALURU (Reuters) – The dollar\u2019s direction is in limbo as financial markets await a clearer path from the U.S. Federal Reserve, according to a Reuters poll of FX strategists who were split on where they expected the currency to trade over the next three months.<\/p>

A U.S. one dollar banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS\/Dado Ruvic\/Illustration<\/figcaption>

On the back foot even before Fed Chair Jerome Powell\u2019s comments last Friday at Jackson Hole, the greenback has lost almost 1.4% since it hit a nine-month high about two weeks ago. But it is still up around 3% for the year.<\/p>\n

While analysts in the Aug. 30-Sept. 2 poll of nearly 60 FX strategists expected the greenback to give up most of those gains over the coming year, they were increasingly uncertain about both the short- and medium-term outlook.<\/p>\n

\u201cThere\u2019s two important forces when we look at the direction of the dollar. The first is the global recovery and the momentum we\u2019ve seen most recently and the second point is obviously the central banks\u2019 response to that,\u201d said Kerry Craig, global market strategist at JP Morgan Asset Management in Melbourne.<\/p>\n

\u201cBecause those two forces are competing at the moment, we\u2019re relatively neutral about the direction of the U.S. dollar.\u201d<\/p>\n

Eventual Fed tapering of its $120 billion of monthly bond purchases, which an over 75% majority of 51 analysts expected the central bank to announce in the final quarter of this year, should help U.S. Treasury yields to move higher.<\/p>\n

\u201cUltimately, we think in a world where real yields will continue to rise over the coming months, it\u2019s likely to be dollar positive,\u201d said David Adams, head of FX strategy in North America at Morgan Stanley.<\/p>\n

\u201cWe continue to be dollar bullish, particularly versus the low yielding funding currencies – that would be the Japanese yen and the euro.\u201d<\/p>\n

Data from the U.S. Commodity Futures Trading Commission released on Aug. 27 showed speculators had once again increased their net long U.S. dollar positions.<\/p>\n

But underscoring the prevailing uncertainty, there was no consensus among analysts who answered an additional question on how the dollar would trade over the next three months.<\/p>\n

Although 23 of 60 strategists said they expected the currency to trade around current levels, 25 said broadly higher. The remaining 12 chose broadly lower.<\/p>\n

While sticking to their long-held view of a weakening dollar over a 12-month horizon, analysts were turning skeptical.<\/p>\n

Asked how confident they were in that view, 62% of strategists, 36 of 58, said they were not confident or not at all confident. Twenty-two chose confident.<\/p>\n

With most major currencies expected to strengthen against the dollar in the next 12 months, the euro was forecast up a little over 2% for the same period. The common currency is down 3% this year.<\/p>\n

Most emerging market currencies were also forecast to weaken or at best cling to a range over the next three to six months as U.S. stimulus withdrawal could push investors to shun the currencies coined the \u201cfragile five\u201d – Turkey, South Africa, Brazil, India and Indonesia – as they did in 2013. [EMRG\/POLL]<\/p>\n

\u201cThe dollar tends to weaken when we have a lot of risk appetite, pulling money into emerging markets and what we\u2019ve seen recently is the Delta variant really shaking up Asian markets and that degree of uncertainty has been amplified by this tapering debate,\u201d said Jane Foley, head of FX strategy at Rabobank in London.<\/p>\n

\u201cIt is a combination of those two factors that have seen flows being pulled back to the dollar. In order for the dollar to weaken again we would have to have a huge amount of flows going into emerging markets, and I can\u2019t see that happening imminently.\u201d<\/p>\n

(For other stories from the September Reuters foreign exchange poll:)<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

BENGALURU (Reuters) – The dollar\u2019s direction is in limbo as financial markets await a clearer path from the U.S. Federal Reserve, according to a Reuters […]<\/p>\n","protected":false},"author":3,"featured_media":120847,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"\nDollar lost for direction awaiting Fed to set its path: Reuters poll - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/dollar-lost-for-direction-awaiting-fed-to-set-its-path-reuters-poll\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dollar lost for direction awaiting Fed to set its path: Reuters poll - Fin2me\" \/>\n<meta property=\"og:description\" content=\"BENGALURU (Reuters) – The dollar\u2019s direction is in limbo as financial markets await a clearer path from the U.S. Federal Reserve, according to a Reuters [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/business\/dollar-lost-for-direction-awaiting-fed-to-set-its-path-reuters-poll\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-03T01:53:43+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/09\/Dollar-lost-for-direction-awaiting-Fed-to-set-its-path-Reuters-poll.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/business\/dollar-lost-for-direction-awaiting-fed-to-set-its-path-reuters-poll\/\",\"url\":\"https:\/\/fin2me.com\/business\/dollar-lost-for-direction-awaiting-fed-to-set-its-path-reuters-poll\/\",\"name\":\"Dollar lost for direction awaiting Fed to set its path: Reuters poll - 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