Dollar Likely to Fall if Risk Appetite Improves, Fed Avoids Rate Rises -- Market Talk

Dow Jones06-08 20:29

1228 GMT - The dollar is likely to weaken in coming months if risk appetite recovers and the Federal Reserve avoids raising interest rates, Morgan Stanley strategists say in a note. Positive risk sentiment in the absence of higher U.S. rates is dollar negative, they say. If U.S. economic outperformance leads to U.S. rates rising in excess of peers, however, the outcome would be more dollar positive, they say. "With the European Central Bank and Bank of Japan both expected to hike rates this month, the compression in rate differentials should lead risk positivity to weigh on the dollar." The DXY dollar index falls 0.2% to 99.921 and Morgan Stanley expects it to reach 94.000. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

June 08, 2026 08:29 ET (12:29 GMT)

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