Economics
Morgan Stanley Stays Bullish on the Dollar
- Resilient U.S. economy, bets for Fed hikes to support USD
- Unexpected rise in U.S. inflation key risk to strategy
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Morgan Stanley is sticking to its bullish stance on the dollar, citing a resilient U.S. economy and bets for rising interest rates. The bank also expects tariff negotiations to lead to a positive outcome that will allow America’s trade deficit to narrow.
Risk markets should recover as there is little reason for them to react to growth concerns at a time when the U.S and Chinese economies are performing well, strategists including Hans W Redeker wrote in an April 5 note. The dollar “will see the initial positive reaction to rebounding risk appetite, with U.S. rates expectations lending support,” they wrote.