More short-term USD weakness. "The dovish Fed – discouraging USD bulls – has led to a de-positioning move supporting the once shunned currencies. GBP, AUD and many emerging market currencies fall into this category. In this respect, the falling USD has the characteristics of a pain trade that seems to have further to run," argues Morgan Stanley. "Central banks determine the short-term cost of capital, and thus steer money market flows. However, long-term FX trends are driven by relative investment return differentials. When it comes to ... READ MORE
