- Bloomberg citing that Morgan Stanley is sceptical over whether the US dollar is set to broadly continue its recent weakening trend. They describe the 100 level for the USD Index as “important both psychologically and technically and may prove a tough nut to crack absent a change in global forces.”
- Despite the greenback’s recent trajectory amid the Fed’s nod toward future policy easing at Jackson Hole, Morgan Stanley notes that ongoing weakness in Chinese and European data make USD shorts “less compelling”.
- Additionally, MS cite the upcoming US presidential election as a clear USD-positive event and believe political risks in Europe may remain underpriced.
- MS believe markets may be less willing to price in cuts from the BOE and the RBA, compared to the BOC and ECB, and therefore EUR and CAD shorts stand out to them as candidates for a dovish repricing. MS favour short USD/JPY to position for falling US rates.
USD: Morgan Stanley Unconvinced On Further DXY Weakness
Last updated at:Sep-03 10:55By: Jack Lewis
US
- Bloomberg citing that Morgan Stanley is sceptical over whether the US dollar is set to broadly continue its recent weakening trend. They describe the 100 level for the USD Index as “important both psychologically and technically and may prove a tough nut to crack absent a change in global forces.”
- Despite the greenback’s recent trajectory amid the Fed’s nod toward future policy easing at Jackson Hole, Morgan Stanley notes that ongoing weakness in Chinese and European data make USD shorts “less compelling”.
- Additionally, MS cite the upcoming US presidential election as a clear USD-positive event and believe political risks in Europe may remain underpriced.
- MS believe markets may be less willing to price in cuts from the BOE and the RBA, compared to the BOC and ECB, and therefore EUR and CAD shorts stand out to them as candidates for a dovish repricing. MS favour short USD/JPY to position for falling US rates.
