Morgan Stanley Forecasts Dollar Weakness for Next Year

Morgan Stanley Research predicts continued weakening of the US dollar over the coming year. Experts Vishwanath Tirupattur and Serena Tang attribute this prediction to convergence of U.S. interest rates with those of its global peers, leading to a decrease in dollar demand. Increased hedging flows from foreign exchange are driving up risk premiums, likely causing further selling pressure on the USD. Safe-haven currencies like the Japanese yen, Swiss franc, and euro are anticipated to gain from this trend.