In this news, we discuss the Deutsche Bank says does not see good risk reward in shorting dollar anymore.
LONDON (Reuters) – Deutsche Bank said on Wednesday it had changed its mind on the US dollar given the extremely uncertain outcome of the US election and no longer saw a “compelling story” for the weak dollar.
Deutsche cited three reasons for its shift in perspective: easing expectations for a strong fiscal stimulus, the risk of a protracted contested election result, and the possibility that electoral uncertainty could lead to politicization of containment measures. of COVID-19.
“Overall, we no longer see a good reward in terms of the risk of shorting the dollar, especially against emerging currencies,” Deutsche Bank analysts said in a note, referring to emerging market currencies. .
The dollar = USD rose 1.2% overnight to hit more than a month highs against its rivals, with early US presidential election results indicating a close race.
Reporting by Dhara Ranasinghe, editing by Abhinav Ramnarayan
Original © Thomson Reuters