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21.11.2018 11:41 AM
The overvalued dollar will continue to grow?

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The dollar has too many advantages, both current and future, for growth. The market has long taken them into account. At the same time, the problems of the huge trade deficits of the United States with the rest of the world, the political division of the country remained. In addition, the desire to bet on an even more expensive dollar and further discourage trade wars from investors. To protect US financial claims to the rest of the world, there is also a creeping loss by the dollar of its usual lion's share in global payments for supplies. More and more countries, including Europe, are looking for workarounds through national currencies.Analysts of leading financial funds are increasingly saying that the dollar is overvalued.The other day, Morgan Stanley announced the end of the "bullish" trend of the US currency. According to bank analysts, it's time to think about selling dollars."We believe that the dollar has reached its peak at current levels. The rate may weaken as credit spreads widen, stock prices fall, and sovereign bond yields also begin to decline amid disinflationary pressure and falling oil prices," the financial department said.Morgan StanleyMorgan Stanley believes that "bearish" sentiment will strengthen the expected slowdown in US GDP, lower oil, stabilize the yuan and tighten liquidity in US markets. The assets of the EM, which suffered because of the growth in yield of treasuries and the strength of the dollar, now began to "shine". A fall in oil prices and stable prices for building materials, including iron ore and copper, may signal a rally in an emerging market.Goldman Sachs and Credit AgricoleThe group of currency strategists from Goldman Sachs also joined the negative forecasts. According to their estimates, the US currency "is approaching a peak, which should ease the pressure on such currencies as the yuan." Analysts from Credit Agricole expect a decline in the dollar since the Democrats "seized" the House of Representatives.Note that we are talking about the medium and long-term prospects of the greenback. Attempts to dollar "bulls" partially return lost positions can be repeated until the end of the year.For example, BBH experts foreshadow the continuation of the dollar growth. Even the expectation of a possible softening of the position of Federal Reserve officials will not hinder this trend.Recently, traders have paid more attention to the "pigeon" rhetoric of representatives of the regulator, rather than to strong US statistics."We believe that the fundamental picture is favorable for the US currency and we see no prerequisites for changing our forecasts regarding the further growth of the dollar against the background of the global stock indices decline. The current slowdown in the US economy is in line with our expectations, and its growth rates remain high. In addition, we see an increase in the risks of the failure of the Brexit talks and the imposition of penalties by the European Union on Italy. These events should provide additional support for the dollar," bank analysts write.

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Natalya Andreeva,
Analytical expert of InstaForex
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