Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dollar most oversold in 40 years, says Morgan Stanley; exits short position

Published 08/07/2020, 05:14 AM
Updated 08/07/2020, 05:25 AM
© Reuters. A U.S. Dollar banknote

© Reuters. A U.S. Dollar banknote

(Reuters) - The dollar is at its most oversold level in over 40 years, investment bank Morgan Stanley (NYSE:MS) said on Friday, adding it had now shifted from its dollar-bearish stance and turned "tactically neutral" on the U.S. currency.

The bank has exited its short position on the dollar index (=USD) (DXY) which measures its value against a basket of currencies, while also closing long positions on the euro and Australian dollar versus the greenback.

It added moreover that risks appeared to be building for the equity rally, following improving company earnings and investment inflows in the past fortnight.

A sentiment gauge called the Combined Market Timing Indicator was now giving a 'sell' signal for the first time since January 2018, Morgan Stanley said.

© Reuters. A U.S. Dollar banknote

"With global markets appearing tactically stretched a sell signal on our MTI (market timing indicator) would certainly add to the notion that upside on markets may be capped near term," it told clients in a note.

Latest comments

Lols.... Okay MS, what ever you say...
DXY target price:90
🤨 I dont belive them dollar is on edge of free fall.. Why they dont open long they know that just want to fool people to go long and hit their stop losses.. Scam.. Dollar is falling 😌 What to know my evidence if they are so confident i dare them to open longs.. Sell the dollar like no tomorrow for me 😏.
i closed my sell gold drop u did see that . 😮.....
 there is correction in short term before continuation in the fall .... there is a good trade on gbp usd  go there see my comments
 im in euro usd and gbp usd section .. come join  us there nice chance in short term
More like overbought liars.
China is holding $ 3.154 TRILLIONS. So , last month China lost 5% of their buying power even as they have trade surplus.
Funny how it seems 😆. Confident tricksters.
And they hope everyone follows like sheep.
for sure they close shorts . but never open longs too. no one wants to be hero now.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.