By Hari Kishan
BENGALURU (Reuters) – The reflation trade that spooked currency markets and threw them into disarray will be in play for at least another month, according to a Reuters poll of strategists, who were still holding on to their outlook for dollar weakness in the long run.
Benchmark U.S. Treasury yields vaulted to their highest since the pandemic began last week on improving economic expectations and inflation concerns, what has become known as the reflation trade.
That dramatic surge in bond yields, which knocked global stocks off their record highs, has challenged overwhelming bets against the dollar, with the currency up over 1% this year.
While recent moves have confounded analyst expectations for a weaker dollar in 2021, the March 1-3 poll of over 70 foreign exchange strategists showed the consensus for broad dollar weakness in a year was still intact.
But a majority, 50 of 65 strategists, in response to an additional question predicted moves in currency markets based on an upswing in economic activity and prices, or the reflation trade, would continue for at least…