Morgan Stanley: The Fed is expected to significantly cut interest rates, and the US dollar may weaken in the coming year.

Jin10 data reported on October 27, Morgan Stanley strategists stated that due to the Fed's interest rate cuts appearing to exceed those of the Central Bank of Europe, the dollar may weaken in the coming year. They pointed out that the weakening of the U.S. growth advantage could be another factor putting pressure on the dollar. “The expected slowdown in U.S. growth reflects the lagging effects of tightening policies, a decline in net immigration inflows, relatively mild fiscal support, and short-term drag from tariff policies.” Additionally, uncertainties surrounding U.S. policies on trade and Fed independence still point to a weakening dollar. Meanwhile, concerns about the fiscal sustainability of regions outside the U.S. are expected to ease.