Deutsche Bank says does not see good risk reward in shorting dollar anymore

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

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