A recent Reuters poll of foreign exchange strategists reveals a modest downward revision in Euro (EUR) forecasts, with the EUR/USD pair now expected to trade at 1.15 in three months and 1.16 in six months, compared to previous forecasts of 1.16 and 1.17, respectively. The one-year forecast remains unchanged at 1.18, indicating expectations for gradual Euro appreciation over the longer term [1]. The poll also highlights persistent skepticism regarding the effectiveness of Japanese currency intervention, as 55 out of 58 FX strategists surveyed believe that future interventions by Japanese authorities alone would not be sufficient to sustainably curb the Yen's weakness [1].
On the day, the Euro was the strongest against the New Zealand Dollar, with a 0.55% gain, and showed modest gains against other major currencies such as the US Dollar (+0.15%), British Pound (+0.03%), and Japanese Yen (+0.05%) [1].
Societe Generale’s Kit Juckes, referencing Scott Bessent, notes that recent coordinated US-Japan action to support the Japanese Yen is part of a broader US trade strategy. While Japan aims to stabilize the Yen and contain import prices, the US is focused on limiting Dollar appreciation versus key Asian trade partners, whose currencies have weakened significantly in real terms. Juckes states, "History suggests that a single round of intervention is unlikely to be sufficient to turn the trend around, and the FX market is on high alert for the next move" [2]. He further explains that for the US, supporting the Yen is about preventing further Dollar appreciation relative to its largest groupings of trade partners, while for Japan, it is about preventing further Yen weakness and rising import prices [2].
Both sources emphasize skepticism about the lasting impact of currency interventions, with strategists doubting their effectiveness and analysts noting that history suggests a single intervention is unlikely to reverse the trend [1][2]. The FX market remains vigilant for further actions, reflecting ongoing uncertainty and heightened sensitivity to policy moves.
CONCLUSION
Strategists have lowered short-term Euro forecasts and remain doubtful about the effectiveness of Japanese Yen interventions, despite recent coordinated US-Japan actions. The market is alert for further moves, with both analyst and strategist consensus pointing to limited impact from single interventions. Overall, sentiment is cautious, and the FX market is expected to remain sensitive to future developments.