Morgan Stanley Sees US Dollar Sliding 9% Over Next 12 Months

The US dollar will tumble to levels last seen during the Covid-19 pandemic by the middle of 2026, hit by interest rate cuts and slowing growth, according to predictions by Morgan Stanley.

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The US Dollar Index will fall around 9 percent to hit 91 by around this time in 2026, strategists including managing director Matthew Hornbach predicted in a May 31 note.

That will exacerbate a recent decline in the greenback, as trade turmoil weighs on the US currency.

"We think rates and currency markets have embarked on sizeable trends that will be sustained — taking the US dollar much lower and yield curves much steeper — after two years of swing trading within wide ranges," the strategists wrote.