Morgan Stanley: If risk appetite improves, the US dollar may fall.

Morgan Stanley strategists stated in a report that if risk appetite improves, the US dollar may weaken in the coming months. They suggest that amidst strong US profits boosting the stock market, a positive risk appetite could drive down the US dollar. However, they note that this view is contingent on upcoming US data not being too weak to cause profit expectations to be lowered, nor too strong to spark discussions of a Fed rate hike. They suggest that otherwise, the US dollar may benefit from the narrowing interest rate differential between the Fed and the ECB. The DXY US dollar index held steady at 97.903, with Morgan Stanley predicting the index to reach 95.000.