Morgan Stanley Among Banks Challenging Growing Dollar Optimism

Macro
โดย Bloomberg·Read original
Summary · why it matters

Currency strategists at Credit Agricole, Morgan Stanley and TD Securities are among those bucking the consensus call for a stronger dollar. The Bloomberg Dollar Spot Index surged 2% in June, its best month since the outbreak of the Iran war, driven by expectations for high or even higher interest rates from the Federal Reserve after new Chairman Kevin Warsh stressed the central bank's commitment to fighting inflation. Speculative traders' bullish stance on the dollar has become the most extreme in a year-and-a-half, leading forecasters including Stephen Jen's Eurizon SLJ Capital to argue that investors have largely exhausted gains from betting on dollar strength. Valentin Marinov, head of G-10 currency research and strategy at Credit Agricole, said the dollar is looking overbought and overvalued and that the Fed may not be as hawkish as expected. The next test for Fed expectations comes with US employment data on Thursday, projected to show around 115,000 jobs added last month alongside rising wages, which could keep bets on Fed hikes intact.

Impact on stocks 6

Financials▼ · 6 stocks
Credit Agricole SA
ACA
▼ NegativeCapitalrelevance

Credit Agricole's currency strategist argues the dollar is overbought and overvalued, potentially impacting their trading positions and client advisory.

Morgan Stanley
MS
▼ NegativeCapitalrelevance

Morgan Stanley's currency strategists are challenging the bullish dollar consensus, which could reduce trading revenues if the dollar weakens.

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