Traders Need to Be More Picky in Betting Against the Dollar
- ‘Currency markets should become more fundamental’: JPMorgan
- Bank favors currencies with ‘structural resilience’ like yen
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There may be opportunities for investors to sell the dollar as the global economy rebounds in the second half of 2020, but they need to be fussy about what to trade it against as the U.S. currency looks set to remain broadly resilient.
That’s the view of JPMorgan Chase & Co. strategists who recommend selling the greenback against currencies of industrialized nations with strong current account balances, such as Sweden and Japan, even as they caution against taking an underweight stance on the dollar more generally. On the emerging-markets side, JPMorgan recommends sticking to bets on currencies with high real yields like Mexico’s, Russia’s and Indonesia’s, according to a mid-year outlook published by the bank on Thursday.