U.S. dollar will keep the status of safe haven currency in 2023

According to a Reuters poll of market strategists, the U.S. dollar might strengthen against many currencies in the upcoming months. This strengthening is driven by the growing threat of an economic recession, which prematurely pushes investors into risky assets. 

The Federal Reserve’s (Fed’s) monetary policy substantially limits the growth of the national currency. However, the risk of a more serious economic downturn and new round of inflation motivates investors to take actions.

A Reuters poll showed that the dollar is likely to be traded at the same levels a year from now. Also, the American currency will maintain a 10% gain recorded this year, even taking into account its recent fall.

The euro against the U.S. dollar has recently risen by 10% from the low of September, but it’s still down 8% since the beginning of the year. The European currency is expected to lose another 3% and trade at the level of 1.02 per dollar by the end of February.

The pound sterling has demonstrated an even more significant increase, rising by 17% from its September’s low of 1.0382. However, market strategists believe that three months after the pound will lose about 5% and will be traded at the level of 1.16 per dollar.

The Japanese yen has fallen by nearly 20% since the beginning of 2022. Currently, it’s trading at the level of 136.50 per dollar. According to forecasts, it may rise to 139.17 over the next quarter, but then decline again, reaching the level of 132.67 per dollar by the end of the following year.