After the US dollar fell to its lowest level in three months against its six main rivals, Wall Street strategists including Goldman, JPMorgan, Deutsche Bank and Citigroup have argued in recent days that the long currency rally could finally be finished, as the Financial Times (FT) quotes.
“Several accessories for the dollar have recently disappeared or started to waver.”
“We have discouraged investors from putting dollar shorts in their portfolios in recent months due to our concern [backdrop], but that has changed. “
“The major economies, including China, had started to reopen with low infection rates, while the Franco-German proposal for an EU stimulus fund had boosted the euro by easing budgetary concerns over across Europe.
“We now believe it is appropriate for investors to position the dollar in their portfolios lower.”
A stronger sense of global growth, as the blockages were eased, had become a “key driver” for the sale of the dollar. “
“We no longer have the confidence to counter this optimism and further neutralize our previously defensive trade recommendations.”
“If the global economy really bottomed out and rebounded, and US interest rates were zero and potential growth was below that of emerging markets, we could see the dollar enter a bear market that could last five to ten years. “