The euro should hold on to recent gains made against the dollar over the next 12 months, underpinned by higher interest rates while the currency union's sovereign debt crisis continues to rage, a Reuters poll showed.
Conducted largely before Wednesday's shock credit rating downgrade of Portugal to junk status, the monthly survey of around 50 strategists showed the euro weakening slightly in a year's time to around $1.39 from $1.43 currently.
That was roughly unchanged from last month's poll. While the euro fell on Wednesday after the Portuguese downgrade, it has gained more than 7 percent against the dollar this year. A widely expected interest rate hike from the European Central Bank on Thursday should lend it support.
The ECB has been the first of the "big four" central banks - also including the US Federal Reserve, the Bank of England and the Bank of Japan - to hike interest rates since the Great Recession, and looks set to keep doing so over the next 18 months.
Economists polled by Reuters do not see the Fed hiking interest rates until at least the first quarter of next year -a scenario that will only emphasise the euro's yield advantage.
"Euro/dollar will have the tendency to go somewhat higher," said Sebastien Galy of Societe Generale, the most accurate one-month forecaster in the June poll. The poll showed the euro slipping to $1.42 in three months and six months.
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