Morgan Stanley changes its dollar outlook
Morgan Stanley has abandoned its expectation that the U.S. dollar would continue to weaken in the second half of 2026.
The bank’s analysts said the Fed’s hawkish stance, relatively stronger U.S. interest rates compared with other countries, and political risks weighing on the euro are supporting the dollar’s outlook.
Morgan Stanley now expects the euro/dollar exchange rate to fall to 1.10, while the U.S. Dollar Index is projected to rise to 104 by mid-2027. Despite the shift in its outlook, analysts are maintaining a tactically neutral position on the dollar.
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