A majority of analysts in Reuters polls, however, were split on the duration of the greenback's bullish trend and forecast its allure to fade in a year.
By Rahul Karunakar
BENGALURU (Reuters) - Near-term bets in favor of the dollar should be increased, a majority of analysts in Reuters polls said, who however were split on the duration of the greenback's bullish trend and forecast its allure to fade in a year.
Tracking the Federal Reserve's surprisingly hawkish outlook at the June meeting, the dollar ended its two-month losing streak and gained about 3% against a basket of currencies last month, marking its best monthly performance in 4-1/2 years.
What has also supported the dollar and other safe-haven assets - including Treasuries and the yen - is the spread of the highly contagious Delta variant of COVID-19, which is threatening the global reopening.
Still, the June 28-July 1 poll of over 70 foreign exchange analysts showed the U.S. currency would broadly weaken against most major currencies in 12-months' time, a view held for well over a year.
But in response to an additional question, about 75% of analysts, or 38 of 51, suggested long dollar bets and short other major currencies or emerging market ones in the next three months as a positioning strategy.
"We are in a dollar positive regime for the next few months, which will generate some dollar strength in the near term. But over a longer time horizon, we expect the dollar to remain in a fairly broad-based range," said David Adams, head of G10 FX strategy North America at Morgan Stanley.
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