Morgan Stanley analyst Sophia Drossos says shorting the euro and going long on the dollar is likely to make money across a wide range of economic scenarios in 2010.
Long U.S. dollar "is a trade that can work in environments of risk aversion as well as stronger global growth,” Drossos notes.
“Because we believe a revival in the global economy will be led by U.S. growth outperformance against G4 economies … one way to express this view is to short" the euro versus the U.S. dollar.
“Continued concerns regarding fiscal frictions in the Euro zone are an important headwind to the euro that would likely be magnified in a prolonged bout of risk reduction.” (more)
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