Morgan Stanley strategists are sellers of the U.S. Dollar against the Euro, Pound and Yen and buyers of U.S. treasury bonds.
The Dollar has recovered from recent losses after President Donald Trump raised the spectre of a universal import tariff once again.
The British Pound can extend a short-term recovery against the U.S. Dollar amidst growing confidence the worst-case universal tariff scenario is off the table. But the recovery will be tested mid-week by the Federal Reserve interest decision.
The Dollar extended a run of losses after the new U.S. President made it clear he wants lower interest rates and all but confirmed a blanket import tariff won't be considered.