US dollar index to end 2023 at 98 and the Euro/Dollar to end at 1.15 accounting to this investment bank

Morgan Stanley strategists said over the weekend as they became more optimistic about the global economy, the U.S. dollar is going to drop further, 

The Target

They now see the DXY dollar index (DXY) ending the year at 98, from a forecast of 104. They see the euro (EURUSD) climbing to $1.15, vs. a previous forecast of $1.08, as the investment bank also raised its year-end targets on the British pound (GBPUSD) and the Canadian dollar (CADUSD).

Three Reasons Behind The Forecast

  1. Global growth will be less bad than expected
  2. Uncertainty over policy and inflation is falling
  3. The dollar advantage is being gradually destroyed by higher yields outside the US.

Other Reasons

Several analysts are becoming more optimistic about the global economy, mainly on the back of China’s relaxation of zero-COVID rules, and a warmer-than-expected winter in Europe that has helped quell demand for natural gas.