The latest Reuters poll of analysts on the EUR/USD outlook in the coming year showed that the renewed US dollar demand is expected to fade away in the months ahead, leaving door open for a test the 1.24 handle again.
Key Findings:
The current dollar resurgence to end within next three months, nearly 60% of 60 economists say; rest say later.
Change in monetary policy is the biggest risk to US dollar, about 60 percent of more than 40 analysts said.
Euro to gain over 5 percent vs. dollar to $1.24 in a year ($1.27 in May poll).
Daniel Hui, Executive Director of global FX strategy at J.P. Morgan, noted: “We find it premature to crown the dollar king and extrapolate continued broad USD strength into and through the second half of the year. Cyclical divergence favoring the USD is fading as global data gradually stabilizes and global policy normalization is still the baseline case.”
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