Deutsche Bank: If Warsh Avoids Releasing Policy Signals, Carry Trade Opportunities Will Emerge

Odaily News, George Saravelos, Global Head of Foreign Exchange Research at Deutsche Bank, stated that Fed Chair Kevin Warsh's goal is to "avoid expressing views on this year's monetary policy as much as possible, thereby minimizing the impact on market pricing." If Warsh can achieve this, the U.S. dollar is likely to weaken, and "the path for summer carry trades will be fully opened." In a note sent to clients on Wednesday, Deutsche Bank said that as the limited impact of the Iran war on markets fades, it is "difficult not to be bullish on risk assets." The bank pointed out that global economic growth forecasts have barely changed since last year, and this resilient growth outlook "is not particularly a bullish signal for the U.S. dollar." Deutsche Bank also believes that, in terms of potential for upward revisions to growth expectations in the coming months, Europe "has the greatest potential."