Morgan Stanley analyst: recommends selling dollar, bullish on sterling, Aussie appreciation

On 9 December, it was reported that Morgan Stanley pointed out in its latest research report Time to Sell that the US dollar has digested most of the positives and advised investors to short the greenback. The report argues that the market is over-expecting the speed and scope of Trump's trade policies and overestimating the impact of positive US economic data. David Adams, an analyst at the bank, recommended buying GBPUSD or AUDUSD, with targets of 1.32 and 0.675 respectively.

The analysts said that the current market is generally bearish on the dollar consensus expectations, but suggests that there is a ‘painful trade’ asymmetric risk. Sterling and the Australian dollar by trade tensions are relatively small, and is currently trading near historic lows, with room to rise. In addition, the negative factors of the euro has been fully digested by the market.