What Morgan Stanley expects in the week ahead for USD, EUR, JPY, CHF, CAD and AUD
USD: Selective Pullback. Bullish.
We stick to our medium term USD bullish view but acknowledge that in the face
of a disappointing ECB, EURUSD rallies could have a broader impact on FX
markets, pressuring USD elsewhere. That said, we would expect high beta and EM
currencies to remain weak against USD. The ECB’s disappointing outcome should
weigh on risk appetite, as it reduces hope for a boost to global liquidity. We
would remain long USD/EM, but are more cautious against G10 currencies.
