Institutions like Morgan Stanley do not agree with the market's mainstream bullish view on the US dollar.

Foreign exchange strategists from the French Agricultural Credit Bank, Morgan Stanley, and TD Securities have all gone against the mainstream market view and do not believe the US dollar will strengthen. Bloomberg's US Dollar Spot Index rose 2% in June, marking its best monthly performance since the outbreak of the Iran war. One of the key factors driving this rally is the market's expectation that the Federal Reserve will keep interest rates high, and even raise them further. Earlier, the new Federal Reserve Chairman, Kevin Wash, emphasized at a press conference on June 17 that the central bank will focus on combating inflation. The momentum of the US dollar's rally is so strong that speculative traders' bullish bets on the dollar have reached the most extreme levels in a year and a half. In this context, more and more forecasters, including Stephen Jen's Eurizon SLJ Capital, are beginning to believe that the potential gains from betting on a rising US dollar have now been largely exhausted. Valentin Marinov, head of G-10 foreign exchange research and strategy at the French Agricultural Credit Bank, said, "The US dollar appears to be overbought and overvalued. The hawkishness of the Federal Reserve may not be as strong as the US interest rate market expects."