Morgan Stanley analyst: Recommend selling the dollar, bullish on pound and Australian dollar appreciation potential

TechFlow news, on December 9, according to Jinshi News, Morgan Stanley stated in its latest report titled "Time to Sell" that the US dollar has already priced in most of its positive factors and recommended investors to short the dollar. The report argues that markets have overestimated both the speed and scope of Trump's trade policies, as well as the impact from stronger-than-expected U.S. economic data. Analyst David Adams suggested buying British pound versus U.S. dollar or Australian dollar versus U.S. dollar, with target levels at 1.32 and 0.675, respectively.

The analyst noted that the current broad market consensus favoring a strong dollar actually implies asymmetric risks for a "pain trade." The British pound and Australian dollar are relatively less affected by trade tensions and are currently trading near historical lows, leaving room for appreciation. Additionally, negative factors surrounding the euro have already been fully priced in by the market.