Although the majority of forex strategists still expect the dollar to weaken, bullish dollar momentum is increasing.

According to a Reuters survey, the majority of foreign exchange strategists believe that as oil prices fall, easing inflation concerns and expectations of Fed rate hikes, the recent rebound of the US dollar will fade in the coming months; however, there is also a significant number of strategists who believe that the strength of the US dollar will continue. Data from the US Commodity Futures Trading Commission shows that with the temporary easing of tensions between the US and Iran, the dollar has rebounded by about 4% from its low point in May, while crude oil prices have also fallen to pre-conflict levels, and bets on a stronger dollar have reached their highest level since January 2025. The US dollar is also supported by the following factors: higher than target inflation rates, strong economic performance, high bond yields, and news in June that nearly half of Fed policymakers expect rate hikes this year. The interest rate futures market has already priced in expectations of nearly two rate hikes before the end of the year. However, in a survey conducted from June 26 to July 1, foreign exchange analysts did not agree with this market pricing, but instead maintained their long-standing view that the dollar will weaken. The median estimate in the survey shows that the euro-dollar exchange rate will rise by 2%, reaching 1.16 by the end of September, 1.17 by the end of the year, and 1.18 a year later.