Morgan Stanley: US Dollar Faces Downward Risk Due to Interest Rate Differentials

Morgan Stanley analysts said in a report that the risk of the US dollar seems to be increasingly inclined to decline. They said that the foreign exchange market appears to be less sensitive to news related to energy supply disruptions caused by wars, with investors focusing on longer-term themes. They believe that investors actually tend to agree with their view that the trading price of the US dollar has more room for discounts compared to interest rate differentials. However, these analysts are cautious about being completely bearish on the US dollar, as they believe that investors may underestimate the shortage of finished oil, which could weaken expectations for economic data and risk aversion. The DXY dollar index fell 0.2% to 98.322.