Political uncertainty in the US has caused the dollar to weaken, forcing many investors to reverse their long positions in the currency to a more neutral stance.
The start of this month saw a political deadlock between the Republicans and the Democrats that led to a government shutdown, and the looming debt ceiling deadline on 17 October has caused further jitters among investors. In the three months to 9 October, sterling has appreciated 7.9% against the dollar, while the euro is up 5.8% over the period, with the dollar trading at £1.60 and €1.35, respectively. This month currency movements have been more muted, but a number of global banks predict the dollar has further to fall. In its latest note, Bank of America Merrill Lynch said its a...
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