Deutsche Bank Recommends to Sell All EM Currencies
Deutsche is with Dollar.
In its quarterly currency report, Deutsche Bank has said that EM currencies are not out of the woods, while Dollar has juice left.
Latest call for hikes from U.S. Federal reserve policymakers in their minutes and at individual speeches have injected a sense of urgency in the market to adjust both in the rates market and as well as currencies. Market is now pricing a little more than a chance of a hike in July.
Deutsche has advised a bit bluntly to sell all EM currencies, especially Asian FX and China. It has called to sell Euro, while it remains long in Yen as ECB has more scope of easing. It expects Euro to visit 1.05 area again by year end.
It examples history that whenever Dollar has been a higher yielding assets (top 3) among G10, it has performed well.
It has recommended strongly to stay clear of Sterling.