US dollar’s strength to continue into next year – Reuters poll

According to the latest Reuters poll, the US dollar is seen extending its upbeat momentum into the next year. Should a partial US-China trade deal is reached, it will knock the buck by 1-2% in the immediate aftermath, the poll suggested.

Key Findings:

“Currency speculators have bought into the optimism and pared their bullish bets on the greenback, taking the total value of net dollar long positions to the lowest in over two months.

Nearly two-thirds of 56 analysts who answered an additional question said the dollar’s dominance would run for at least another six months, and a quarter expected the currency to remain strong for more than two years.

That stands in stark contrast to the start of the year when a majority of analysts were confident the dollar rally was over.

Over 40% of 63 analysts said the dollar index would weaken around 1-2% in the immediate aftermath, if a “phase one” trade agreement is signed by the United States and China. Only five respondents predicted a more than 2% loss.

Fifteen analysts said there would be no material change to dollar exchange rates, while 16 said the currency would strengthen 1-2%. Just one respondent expected the greenback to gain over 2%.

Nearly two-thirds, or 40 of 62 analysts who answered another question said that has pushed the dollar to be overvalued.

When asked by how much, 17 respondents said it was up to 5% overvalued, and another 17 said 5-10%. The remaining six said over 10%.”