Strategists wary of short-term strength risk despite maintaining dollar weakness outlook

Foreign-exchange strategists surveyed by Reuters and published on November 3 maintained their one-year bearish dollar outlook, essentially unchanged from early October, but flagged a growing risk that the dollar could prove stronger than forecast in the near term. The split between the 12-month base case and short-term risk assessment comes ahead of the U.S. midterm elections, with the dollar having recently traded firmer than market expectations. Strategists attribute the tension to resilient U.S. growth and inflation, which make it hard for the Federal Reserve to pivot quickly to easing, alongside geopolitical risks and capital flows influencing dollar moves. The survey did not disclose specific currency pair forecasts, index levels or market-cap figures. It matters because a stronger-for-longer dollar would tighten global financial conditions and pressure emerging-market currencies and dollar-denominated debt. Next, watch U.S. inflation and labor data, Fed commentary and the midterm election outcome for signals on whether the near-term upside risk to the dollar materializes.