In a note to clients, Morgan Stanley said it was cutting its US dollar target suggesting that the dollar could fall to its lowest level against the euro since December 2009. The U.S. currency is likely to reach $1.46 per euro by year-end and trade little changed at 81 yen, Morgan Stanley said in the note sent yesterday to clients.
“The market has become very sensitive about talk of further QE, and the ‘punish the printer’ theme has started to be a major theme in the foreign exchange market,” Stephen Hull, head of global currency strategy in London at Morgan Stanley, wrote in a note dated yesterday. “We have revised our currency forecasts with a weaker profile for the U.S. dollar over the forecast horizon.”