The uncertainty over the dollar has recently led investors to avoid it, with many of them seeing well-founded reasons for its 6-year rally to end.
"The biggest pain of Wall Street now is the dollar," said Mike Swell, portfolio manager of Goldman Sachs Asset Management. Looking at the root of the problem, not the current geopolitical uncertainty, it is noticeable that the prospects for the dollar are still good. Temporary political risk may weaken currency and inflation, but it is a temporary phenomenon, not an apocalypse. Looking at the US economic outlook, the dollar at these low prices is an extremely attractive investment.
The greenback fell against the euro as EUR/USD reached more than $ 1.20 for the first time since January 2015. The fall in the green currencies is triggered in part by weak economic data and a decline in the Trump administration's confidence and the ability to meet its pre-election promises.
All these negative facts sent the dollar's short positions to the highest levels since 2013, and this, on the other hand, provides good opportunities for buying the green currency before the tax reform becomes a reality.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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