Deutsche Bank: The dollar isn't dying, it's mutating into a risk asset
EUR/USD — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 1.1200 |
UOB | Neutral | 1.1450 |
Citi | Bearish | 1.1000 |
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Deutsche Bank strategist Mallika Sachdeva is out with an FX Special Report today that's worth your time, laying out three long-term forces reshaping the dollar. The upshot: the greenback's problem isn't that the world is abandoning it — it's that the world is changing how it owns
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The desk posits that while the US dollar shows a persistent weakness, the potential for a dramatic decline in its reserve status remains limited. Per the full note from UBS, international investor confidence is wavering due to concerns about the US's rule of law and its decreasing global standing. As trade dynamics shift towards stagnation, the urgency of the dollar’s reserve status is dampening, signaling a potential long-term trend of diminished demand for dollar-denominated assets. This perspective is reinforced by recent observations that international appetite for accumulating additional dollar holdings may be waning, even as the risk of a sudden exodus appears low.
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