Morgan Stanley finds ‘silent plurality’ ready to sell dollar
Published On Jan 24, 2025, 4:29 AM
Morgan Stanley's recent analysis highlights a growing number of investors who are inclined to sell the US dollar, despite its strong market presence. The firm identifies a 'silent plurality' of traders who are awaiting an opportunity to short the dollar, as inflation data and potential US Federal Reserve rate cuts could signal a downward trend for the currency. Morgan Stanley forecasts the US Dollar Index to drop to 105 by the end of Q1 2025 and further down to 101 by year-end, suggesting a bearish outlook. They recommend short positions against the euro, yen, and sterling, predicting adjustments in currency pairings in the near term.
Stock Forecasts
UUP
Negative
Morgan Stanley suggests that with a substantial number of investors ready to sell the dollar, there may be significant volatility in the USD. Additionally, the anticipation of a potential Federal Reserve rate cut could further weaken the dollar. Current bullish positions may face sharp corrections as those holding shorts may quickly rush in, further driving down the dollar.
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