Morgan Stanley predicts that the US dollar will significantly decrease by the end of next year.

G10 Foreign Exchange Strategy Director David Adams stated that Morgan Stanley expects the US dollar to drop significantly by the end of next year, as investors may reassess the downside potential of long-term US interest rates and increase hedging against the risk of a weaker dollar. The bank predicts that by the end of 2026, the US dollar index will fall to 89, down about 10% from the current 99.7. The expected decrease in the US dollar is expected to be universal: the euro to US dollar exchange rate is expected to rise from the current 1:1.1533 to 1:1.27 by the end of 2026; the pound to US dollar exchange rate will rise from the current 1:1.3111 to 1:1.47; meanwhile, the US dollar to yen exchange rate is expected to drop from 1:154 to 1:124. Adams said, "The magnitude of the fluctuations we expect is quite significant."