Morgan Stanley Affirms Dollar Resilience Amid De-Dollarization Concerns
Morgan Stanley reaffirms its bullish stance on the US dollar, dismissing de-dollarization fears as premature. The bank's "dollar smile" theory, developed in 2001, continues to hold weight, demonstrating the currency's strength during global market stress. Historical data shows the dollar gains an average 0.8% monthly when both US and international growth disappoint, and 1.1% when US growth outperforms.
Despite an anticipated 11% decline in 2025, Morgan Stanley analysts argue the dollar's structural advantages remain intact. The currency's resilience during recent crises validates their framework, which predicts dollar strength during growth scares and US economic outperformance.