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)