The US dollar could fall 10% over the next 12 monthsMorgan Stanely’s Mike Wilson told Bloomberg while rating a weak dollar as part of the investment bank’s reflation story.
The thesis is that the dollar should be weaker as the United States is likely to be more aggressive with structural deficits in the future. Analysts have long cited the growing twin US deficits (current account and fiscal deficit) as one of the key drivers for the dollar’s decline.
Wilson said that a weak dollar would be favorable for global growth. The dollar index, which tracks the value of the dollar against the majors, has fallen more than 5.7% this year. At the time of writing, the DXY is estimated at 90.97, the lowest level in more than two years.
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