Morgan Stanley has shifted its outlook on the U.S. dollar from bearish to bullish, forecasting sustained strength through mid-2027. The bank expects the U.S. Dollar Index to reach 104. It also projects EUR/USD will fall from approximately 1.14 to 1.10. The revised outlook reverses the firm’s previous position.
Morgan Stanley cites the resilience of the U.S. economy, expectations of further Federal Reserve rate hikes, and persistently high energy prices as factors supporting the dollar. The firm says these conditions will preserve the U.S. interest-rate advantage over other major economies and provide continued support for the currency.