Survey: Investors expect the dollar to strengthen in the short term, but may face pressure in the long term

ChainCatcher news, a recent institutional survey shows that the dollar will stabilize in early 2025, but will face risks such as accelerating U.S. inflation and a surge in fiscal deficits over the next year. As we approach the new year, 89 respondents have differing views on the risks that could pose the greatest harm to the dollar.

Concerns about the deficit accounted for the largest share at 38%, while another 32% of respondents believe that if Trump implements the tariff measures promised during his campaign after taking office in January, the weak economic growth in the U.S. and globally will put pressure on the dollar next year. Although these policies may strengthen the dollar in the short term, the long-term damage to the economy will ultimately suppress the dollar's appeal.

Nevertheless, about 70% of respondents still believe that the dollar index will rise in the next month. Two key themes support confidence in the dollar before the end of the year: first, U.S. Treasury yields will be supported by the Federal Reserve's patience regarding interest rate cuts, which will encourage investors to flow into U.S. assets; second, a series of uncertainties surrounding Trump's future economic policies may lead to safe-haven buying of the dollar.