By Sarupya Ganguly
As the U.S. dollar faces recent losses, a Multibagger poll of foreign exchange strategists reveals that it is likely to claw back its strength over the next three months. Market expectations of multiple Federal Reserve interest rate cuts have led to a significant decline in the dollar's value against major currencies, but experts believe that these predictions may be exaggerated.
Despite a 5% increase earlier in the year, the greenback has lost more than half of its gains due to sluggish U.S. economic data fueling rate cut speculations. However, with policymakers dismissing recession concerns, markets may need to adjust their expectations.
FX strategists in the poll forecast a decline in the euro's value before a gradual recovery, indicating a potential shift in market sentiment. The Japanese yen, on the other hand, has strengthened against the dollar following the Bank of Japan's recent policy decisions.
While recent market volatility has caused some uncertainty, experts remain divided on the dollar's future trajectory. However, many believe that once the U.S. economy stabilizes, the dollar's overvaluation will normalize, leading to a more balanced market.
Overall, investors should remain cautious and monitor market developments closely to make informed decisions about their financial portfolios.