Golden Finance reported that Vishwanath Tirupattur and Serena Tang, strategists at Morgan Stanley Research, clearly pointed out in the report that the continued weakness of the US dollar in the next 12 months will become a key theme of Morgan Stanley Research.
Strategists analyzed: “We expect that as US interest rates and economic growth gradually converge with those of other countries, the US dollar will continue to weaken.” At present, the flow of foreign exchange hedging is constantly increasing. This phenomenon has further pushed up the risk premium, thereby exerting greater selling pressure on the US dollar.
Under the expectation of a weakening US dollar, other safe-haven currencies in the market, such as the Japanese yen, the Swiss franc and the euro, are expected to benefit from it. Previously, Morgan Stanley also released its view, predicting that the US dollar index might decline by about 9% in the coming year, and might even fall to the low level during the COVID-19 pandemic, while the euro, the Japanese yen and the Swiss franc would be the main beneficiaries of the weakening of the US dollar. Interest rates and the money market have initiated significant trends. The Federal Reserve is expected to cut interest rates by 175 basis points, coupled with the slowdown in US economic growth, both of which have become key factors driving the US dollar downward.
Morgan Stanley’s prediction of the US dollar’s trend this time undoubtedly provides an important reference for global financial market participants. Whether the US dollar will remain weak as predicted in the coming year and how the global monetary landscape will evolve are worth continuous attention.
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