According to experts of the investment bank Morgan Stanley, despite the fact that the position of the US currency is still strong, its prospects in the medium and long term look far from optimistic.
"Markets today underestimate the potential for weakening the greenback, taking into account shifts in the course of the US Federal Reserve System (FRS), as well as in indicators of the country's economic growth," said representatives of the financial institute.
"We believe that the USD index has reached a peak. It is assumed that in the future, along with such factors as a slowdown in US GDP growth and a pause in the Fed's monetary tightening cycle, pressure on the dollar will have an outflow of capital from the US securities market, they added.
"The cost of hedging assets issued in the United States has never been so high. Thus, with its use, the yield on investments in 10-year treasuries for a European investor will be negative (-0.35%)," the experts noted.
"It's one thing when foreign investors are confident in the strength of the US currency. In this case, they may not insure risks. Another is when the prospects for the dollar appear to be bearish. If non-residents start to take money (and their investments in the US securities market significantly exceed the investments of Americans in foreign stocks and bonds), then the greenback will obviously not be easy." Morgan Stanley believes.
The bank expects that by the end of this year, the pair EUR / USD may rise to the level of 1.31, and USD / JPY will fall to 102.
