December 11, 2024
The US dollar has performed strongly this year, boosting expectations that it will continue to outperform other currencies in the near future, thanks to a marked improvement in the US economy. However, experts suggest that markets may have over-optimized the dollar’s strength.
According to a report from Morgan Stanley, David Adams saw a noticeable shift in market sentiment, with the general consensus now supporting the continued rise of the US dollar index in the near future. However, we warn that many of the positive factors related to the dollar have already been priced into the market, making the current situation risky and meaning that markets may be exposed to volatility if these expectations do not materialize.
Analysts at the renowned investment bank believe that the market has overestimated the speed and scale of US President Donald Trump’s trade policies. While some trade measures may be taken quickly, their actual implementation may be slower and more restrictive than many expect, with the focus mainly on trade restrictions against China.
Morgan Stanley Bank pointed out that excessive optimism among investors could expose markets to significant risks, as slower policy implementation or unexpected outcomes could cause sharp fluctuations in the value of the US dollar. Read also:
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