By Krishna Eluri
BENGALURU (Reuters) – The and Indian rupee are expected to weaken against the dollar over the coming year, a Reuters poll found, with the greenback supported by U.S. interest rate hikes, though analysts have trimmed their bearish bets on Asian currencies from the previous poll.
While markets do not expect the Federal Reserve to raise interest rates at its policy meeting later on Wednesday, the central bank is tipped to lift rates twice more this year, with one likely as early as next month, which would be supportive of the dollar. [ECILT/US]
In the latest poll of 60 foreign exchange strategists, taken over the past week, the yuan, also known as the renminbi, is forecast to weaken to 7.07 against the dollar in a year from around 6.89, where it was trading on Wednesday.
“There will be moderate strengthening in the U.S. dollar, contributing to stability in the yuan and, by extension, other emerging market currencies,” wrote Dirk Willer, EM strategist at Citi, in a note.
“This is assumed to take place against the backdrop of moderately higher U.S. rates, consistent with our call for two more rate hikes from the Fed this year.”
A separate Reuters poll showed investors reduced bullish bets on most Asian currencies. They fell to the lowest in a month for the Chinese yuan. [ASIA/FXP]
Still, the latest predictions show less conviction in the dollar strength story than was the case last month, with the latest poll medians for the yuan slightly higher than April’s poll.
While concerns remain over President Trump’s policies, especially on Beijing’s large trade surplus with the U.S., the new administration has refrained from declaring China a currency manipulator despite campaign promises to do so.
Separately, the Indian rupee
The rupee has gained more than 5 percent against the dollar so far this year, reaching a 20-month high of 63.92 per dollar late last month.
The expected losses come despite the Reserve Bank of India having moved to a neutral stance earlier this year from an easing bias, although economists in a separate Reuters poll suggested the central bank’s next move will likely be a cut towards the end of the year.
(For other stories from the FX poll:)
(Polling by Shaloo Shrivastava and Khushboo Mittal; Editing by Ross Finley and Sam Holmes)
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Latest posts by investing.com (see all)
- Forex – Australian Dollar Steady After RBA Decision - June 4, 2019
- Yuan Watchers Say 7 Is No Longer a Sticking Point for China - June 4, 2019
- Fresh Losses Coming for Australian Dollar, Strategists Say - June 4, 2019