They seem to be but only temporarily
Morgan Stanley aren't as confident in the dollar as they have been and have actually scaled back some dollar exposure.
"Despite the US economy showing the strength we had expected and US capex plans turning north, suggesting US capital demand rising, the USD has stayed offered. Markets are trading under the impression that the possible threat of the US imposing import barriers may have led to a revised approach from US trading partners. Indeed, in early January the USD started to turn south when China pushed the RMB higher.
Following President Trump's preinauguration press conference, the USD accelerated its decline supported by non-USD G-10 bond yields moving rapidly higher. Of course, the better global
growth outlook may justify some of this development as markets priced in tighter central banks. However, widening EMU sovereign bond spreads tell us that it may be premature to assume the ECB might bring its tapering forward, suggesting the EUR will remain an underperformer.
For the USD to strengthen again we see the BoJ underlining that it maintains its yield curve-managing approach. Upcoming Rinban operations are in focus. Should these operations remain insufficient to manage JGB volatility on the back end of its curve, then USDJPY is likely to break lower clearing out speculative positioning."
They closed longs USD vs KRW (NDF) and NOK at yesterday's NY close.
That's about as bearish as they get as they're holding their AUDUSD short at 0.7540 (TP 0.6800, stop 0.7800), short EURUSD at 1.0650 (TP 0.9900, stop 1.0850) and long USDJPY at 112.50 (TP 120.00, stop 110.00).
Here's their brief update on several pairs;
I've got to add that for all the ribbing we give them over their trades and ideas, this weekly FX Pulse report by Hans Redeker and crew is a fantastic work of analysis, and they really do go deep into many global regions.
If you can get hold of the whole document, it's very much worth a read.
