From Yahoo Finance: 2025-06-02 16:38:00

Wall Street banks predict the dollar will weaken due to interest rate cuts, economic slowdown, and Trump’s policies. Morgan Stanley, JPMorgan Chase & Co., and Goldman Sachs all foresee a decline. The dollar fell on Monday against all peers, with the Bloomberg Dollar Spot Index nearing its weakest level since 2023.

Trade tensions and doubts about US assets have led investors to reassess their exposure to the dollar. Morgan Stanley projects the US Dollar Index to drop 9% to 91 within a year. JPMorgan strategists recommend bets on the yen, euro, and Australian dollar. The euro climbed to $1.1450 and is expected to reach $1.25 next year.

Morgan Stanley expects the US Treasury yield to hit 4% this year and significantly drop next year with Fed interest rate cuts. Factors like bond market weakness and trade war escalation could further pressure the dollar. Investors are closely watching labor market indicators and trade negotiations for insights into Fed policy and the dollar’s future.

Goldman Sachs highlights potential US tax rate changes as a risk for investors. The dollar is considered overvalued and expected to decline further, driven by global asset reallocation. Concerns about US investments and cross-asset diversification are growing among investors. The dollar may have more room to fall, according to Goldman Sachs strategists.

Read more: Wall Street Sees Deeper Rout as Dollar Nears 2023 Low