Deutsche Bank: dollar selloff has further to go, sees Bund yields higher

FILE PHOTO: The logo of Deutsche Bank is pictured on a company's office in London
FILE PHOTO: The logo of Deutsche Bank is pictured on a company's office in London, Britain July 8, 2019. REUTERS/Simon Dawson/File Photo

June 30, 2020

LONDON (Reuters) – A sell off in the U.S. dollar has further to go, Deutsche Bank said in a report on Tuesday, forecasting the euro could rally to $1.15 by year-end and $1.20 by the end of 2021.

Europe’s single currency is currently trading at around $1.12 <EUR=EBS> and has been lifted in recent weeks by a pick up in economic activity as lockdown restrictions ease.

“The dollar has had a sizeable sell-off since we turned bearish in May, but we don’t think this move is over,” Deutsche Bank analysts said, adding that positioning in risky assets remained underweight.

In a report, Deutsche Bank added that it saw yields on safe-haven German government bonds, or Bunds, rising to -0.2% <DE10YT=RR> by year-end from current levels around -0.45%.

The bank said it was overweight equities on improving data.

(Reporting by Dhara Ranasinghe; editing by Thyagaraju Adinarayan)