Morgan Stanley: The US dollar is expected to depreciate by 9% as the US economic growth slows.

According to Morgan Stanley's forecast, due to the impact of interest rate cuts and slowing economic growth, the US dollar is expected to fall to the levels seen during the COVID-19 pandemic by mid-next year. The bank's strategists, including Matthew Hornbach, predicted in a report on May 31 that a commonly used measure of the US dollar will drop by about 9% from the current level to the level at the same time next year. With continued pressure on the dollar from trade tensions, this will exacerbate the recent decline of the dollar. The strategists wrote, "We believe that interest rates and currency markets have started a sustained trend - the dollar will decline significantly, and the yield curve will steepen significantly - after two years of wide-ranging trading."