While the ECB’s efforts to weaken the euro this year have not delivered on par with investors’ expectations, some market observers still believe the currency is heading for more downside. That does not mean the euro does not face more near-term downside, a scenario that could worsen for the common currency if the dollar rises in anticipation of higher interest rates in the U.S.
“In a note Thursday, Bank of America Merrill Lynch Global Research’s Athanasios Vamvakidis and David Hauner recommended that in hedging “Trump trades,” investors should look to be long the U.S. dollar against the Australian and Canadian dollars,” according to CNBC.
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