Morgan Stanley Thinks the Dollar Has Further to Fall - Business Insider

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Morgan Stanley: Dollar To Lose 9% By Mid-2026, EUR/USD Forecast 1.25 - Exchange Rates UK

The desk interprets Morgan Stanley's call as a significant depreciation forecast for the U.S. dollar, projecting a 9% decline by mid-2026, which aligns with a EUR/USD target of 1.25. This outlook suggests increasing bearish sentiment on the dollar amid potential shifts in monetary policy dynamics. Per the full note, the expected depreciation of the dollar is attributed to various macroeconomic factors, which could impact investor sentiment and positioning. With current spot levels for EUR/USD at 1.1500, this forecast suggests substantial upside potential, moving against a backdrop of diverging monetary policies between the U.S. Federal Reserve and the European Central Bank.