Demand for Dollars: Evidence from Survey Expectations
IMF Working Papers, September 4, 2026
Source details
- Canonical URL
- Demand for Dollars: Evidence from Survey Expectations
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Bibliographic details
- Authors: Benedikt Ballensiefen, Fabricius Somogyi, Hannah L Winterberg
- Published: September 4, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229058872.001
Summary
- Study of the determinants of US dollar demand across market participants and traded instruments using survey-based exchange rate and macroeconomic expectations.
- Empirical strategy leverages granular foreign exchange trading data.
- Overall conclusion: long-horizon expectations predict dollar demand across spot, forward, and swap currency markets.
Main findings
- First: end-user investors increase their dollar purchases when they expect the US dollar to appreciate.
- First (continued): Investment funds and non-dealer banks adjust their synthetic dollar borrowing in the FX swap market in response to forecasted changes in synthetic dollar funding costs.
- Second: cross-sectionally, investors rebalance along the factor structure of currency risk into dollars following an expected dollar appreciation.
- Third: the predictive power of survey forecasts weakens when forecaster disagreement or uncertainty rises.
Data, scope, and instruments
- Uses survey-based exchange rate and macroeconomic expectations.
- Leverages granular foreign exchange trading data.
- Documents predictability of dollar demand across spot, forward, and swap currency markets.
Content in this bundle
- Working Paper