“Whatever the reason, a popular view is for a dimmer dollar. The greenback is 10 percent to 15 percent overvalued, according to Morgan Stanley. A Bloomberg survey of foreign-exchange forecasters shows losses are expected for the greenback against traditional haven currencies such as the yen and Swiss franc. The median forecast for the dollar-yen pair is that it will drop from its current level near 113 yen to 108 yen by the end of 2019,” according to Bloomberg.
While the Federal Reserve is expected to raise interest rates for a fourth time this year later this month, slowing or suspending that tightening cycle in 2019 could weigh on the the dollar.
“However, market-implied odds show traders are skeptical about Fed rate increases in 2019, with less than a full hike expected next year after an anticipated move next week,” reports Bloomberg.
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