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By Indradip Ghosh and Shaloo Shrivastava
Bangalore (Reuters) ) – The U.S. dollar will remain firm against most major currencies for some time to come, although interest rate differentials are expected to narrow as the U.S. economy remains resilient, interest rates will remain narrow for the rest of the year, currency strategists polled by Reuters said.
While the U.S. dollar is still down 0.5% against major currencies this year, as calls for a cut in the fed funds rate fade and expectations of a U.S. recession this year weakened, rising nearly 1.3% in the past week alone. A number of Fed officials, including Chairman Jerome Powell, have advocated at least two more rate hikes, which is in line with market expectations Contrary to interest rate expectations, which also helped support the dollar.
Based on June data, USD won’t give up recent gains anytime soon 09 – July 5th Poll
FX Strategists Despite some major central banks, For example, the European Central Bank and the Bank of England will continue to raise interest rates for a longer period of time.
Kit Juckes, chief FX strategist at Societe Generale, said: “The tightness in the US labor market may help the economy and the dollar in the short term.” OTC: ). “Even if we see (interest rate) convergence, it seems unlikely that the euro will start a new major uptrend without stronger growth.”
In fact, most of the co-contributors showed their views on the dollar versus most major currencies for the next six months were either revised higher or unchanged compared to a month ago.
Meanwhile, the dollar’s net short position has eased since hitting a two-year high in May, according to Commodity Futures Trading Commission data.
Recent data showed that the world’s largest economy remained stronger than expected and fared better than the euro zone, which fell into recession earlier this year.
“We think the dollar has room to rebound in the short term.” Jonas Gore, deputy chief market economist at Capital Economics Jonas Goltermann said: The euro is currently for $1. , expected to rise just under 1%, and trade at $1. within six months.
Sterling, one of the best defenders ever This year’s currency is expected to be $1 changed hands. , slightly below the current $1 level. .