By Candice Zachariahs
July 28 (Bloomberg) -- Investors should sell the dollar against the euro, Norwegian krone and Canadian currency as the global outlook improves, Morgan Stanley said.
The bank advised investors to bet on further declines in the dollar if its weakens beyond $1.4340 versus the euro or drops below C$1.0750. Morgan Stanley also suggested buying Norway’s krone if the Scandinavian currency strengthens past 6.1180 against the dollar.
“As the outlook continues to improve, we believe that currencies with strongest ties to the global growth cycle will outperform at the expense of U.S. dollar,” Yilin Nie, a currency strategist at Morgan Stanley in New York, wrote in a note to clients yesterday. “U.S. dollar weakness may gain momentum.”
The dollar has fallen against 14 of the 16 major currencies this month, losing 1.5 percent against the euro, 3.9 percent versus the krone and 7 percent against the Canadian dollar.
The greenback was little changed at $1.4240 per euro as of 12:40 p.m. in Tokyo from $1.4232 yesterday when it fell to $1.4298, the weakest since June 3. The dollar traded at C$1.0809 from C$1.0812 and bought 6.1834 per krone from 6.1882.
To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net.
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