© Reuters
Investing.com – Morgan Stanley (NYSE:) strategists stated in a note that the US dollar may not weaken again, in response to increasing short positions on the US Dollar Index.
The bank’s strategists expressed concern about betting on a continuous decline in the dollar index and that it entered a bearish environment without any real evidence of that. Analysts from the largest US investment bank believe that the dollar was trading at lower levels below the levels involved in the yield differences.
Analysts considered that the recent drop in the US dollar index reflects expectations that the US and global economies will remain strong and succeed in avoiding recession (which, if it happens, will be accompanied by a rocket launch for the dollar). Those who are confident in the dollar’s decline are also betting that inflation will not return again and that it will remain at low levels towards the targets of global central banks.
The largest US investment bank, JP (EGX:) Morgan, is neutral on the US dollar index due to lack of sufficient evidence to take a positive or negative stance on the index.
The decline in the dollar index recently is linked to the labor market and inflation data, which were calmer than expected and less than expected, which made the markets expect the Fed to stop its plan to continue after the next July meeting. Therefore, it is expected that the Fed’s decision on July 27 and the following press conference by Mr. Jerome Powell, Chairman of the US Federal Reserve, will have a strong impact on the dollar, treasury bonds and their returns.
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2023-07-17 14:15:00
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