Analysts from Rabobank point out that the US dollar has been hit by the recent change in Federal Reserve expectations but warned that other central banks are more dovish. Key Quotes: “The downgrading of market expectations about the pace of future Fed rate hikes has weighed significantly on the value of the USD since the end of January. While it is easy to comprehend why there is less support for long USD positions, it is not so easy to determine what to buy in lieu of the greenback. All other major central banks are maintaining more dovish positions than the Fed and the current low levels of risk appetite have made investors wary of higher yielding currencies.” 2As a consequence we expect the current bout of position adjustment in the USD to run out of steam. That said, we expect the ECB and the BoJ to be hard pressed to substantially push their respective currencies into weaker territory in the coming months and so we forecast that the USD will only be moderately higher vs. the EUR and the JPY on a 12 mth view.” “In reality we expect that heightened levels of investor uncertainty will prevent USD/JPY from rising beyond 122.00 on a 12 mth horizon. We have adjusted our EUR/USD forecasts slightly higher to 1.09 on a 3 month view and 1.05 in 12 months (from 1.04).” For more information, read our latest forex news.