Trump says Iran war "close to over" amid hopes for more negotiations
Investing.com -- Hedge funds are growing increasingly bearish on the dollar as prospects for US-Iran peace talks weaken the currency’s recent war-driven gains, according to Morgan Stanley trading data.
Investors increased their bearish dollar positions through April 10, based on a proprietary trading model from Morgan Stanley. The shift marks a reversal from March, when the Bloomberg dollar index surged 2.4% in its largest monthly gain since July on haven demand during the Middle East conflict.
The dollar index has since declined 1.8% in April, including a seven-day losing streak through Tuesday, as the US and Iran began discussions to resolve the six-week conflict.
"The path to a weaker dollar is widening, not narrowing," Morgan Stanley analysts Molly Nickolin, David Adams and Andrew Watrous wrote in a research report published Tuesday.
The analysts said a ceasefire may support risk currencies in the near term, but medium-term dollar weakness may be more concentrated against major peers such as the euro, yen and Swiss franc.
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