Morgan Stanley is no longer looking for further USD weakness, turn neutral
MS had been looking for further weakness for the US dollar in the near term.
But have shifted the call now to neutral citing
- "an ongoing regime shift in US rates" (and the Fed could begin discussing normalisation in monetary policy as early as June this year)
- driven partly by "meaningful" fiscal expansion (The Democrat win in Georgia will result in further stimulus, MS looking for circa $1tln extra)
- also cite crowded short USD positioning
MS say they are seeking reasons to turn bullish.