An analysis conducted by FX strategists in a recent Reuters survey suggests that despite concerns regarding President Donald Trump's unpredictable tariff announcements and their economic impacts, the U.S. dollar is anticipated to stabilize in the upcoming months. A significant portion of the strategists also raised worries about the dollar's conventional position as a safe-haven asset in currency markets.

Trump is gearing up to impose retaliatory tariffs on U.S. trading partners, adding to the confusion and uncertainty prevailing in currency trading environments. Recent data from Commodities and Futures Trading Data reveals traders reducing their long bets, with some shifting to a 'net short' stance for the first time since October, largely influenced by speculations of three additional Federal Reserve rate cuts this year.

Expert opinion suggests a lack of consensus on how positioning will evolve by the end of April, differing from earlier expectations of an increase in 'long' dollar trades. The ongoing unpredictability surrounding U.S. tariffs has led investors to display caution in pre-positioning for potential outcomes that remain ambiguous.

In a recent survey conducted from March 27 to April 1 involving 35 strategists, opinions were divided on month-end positioning changes, with some predicting a rise in net shorts, while others foresee a decrease. The broader survey involving 69 strategists foresees the euro to trade around $1.07 in three months, increasing to $1.08 in six months, and a further rise to $1.10 in a year.

The U.S. dollar index has experienced a 4% decline this year after a 7% gain in 2024, partially attributed to the euro's ascent driven by optimistic views on Germany's economic resurgence. Despite uncertainties, many believe there isn't sufficient reason for a significant downtrend in the dollar over the foreseeable six to twelve months.