Morgan Stanley which is a multinational investment bank and financial services company of the United States has today released a statement that reduced the end of 2023 forecast for the dollar index to 98, and expects the weakness of the US dollar to be more pronounced against the euro this year as concerns about the economic recession begin. calmed down
They previously looked at the index, which weighs the U.S. currency. against a group of six major currencies, for the year ending 2023 it was trading at 104.
"Global growth is showing signs of buoyancy, macro uncertainty and inflation are diminishing. Indirectly it eliminates the factors that can strengthen the US dollar", said the currency strategist at Morgan Stanley led by James K Lord, in a published note.
The US dollar index, which measures the US dollar against six major currencies, traded at 102.108 with a strengthening of 0.16%.
Wall Street banks now see the euro strengthening against the US dollar to 1.15 by the end of the year compared to a previous forecast of 1.08. The euro last traded at 1.08.
Among G10 currencies, MS strategists expect negative returns for the year from the British pound given domestic growth challenges, and from the Japanese yen due to its preference as a funding currency.
China's yuan is expected to end the year at 6.65 per dollar, they said, up from 6.73 it last traded at. The bank's previous year-end forecast for the yuan was 6.80.
“In emerging markets, we see around 5% total returns through the end of the year. Outliers include those likely to be sensitive to a recovery in the Chinese economy, including underperforming currencies in 2022 such as Chile. peso,” said Morgan Stanley analysts.
