MS · News · 20261006N

FX / Currency Headwinds

MORGAN STANLEY · 2026-10-06 · Importance 10 · Surprise 6

Morgan Stanley FX and Emerging Markets Strategy Head James Lord expects the euro to decline further, potentially reaching $1.10. The outlook reflects risks in France and the broader European economy, alongside developments involving Brazil’s election. Separately, Morgan Stanley shifted to a neutral U.S. dollar view with a bullish skew, remained bearish on the Japanese yen, and recommended the Norwegian krone against the euro and Swedish krona as an energy-price hedge.

Key facts

• James Lord, Morgan Stanley's FX and Emerging Markets Strategy Head, predicts the euro could potentially reach $1.10. source
• Morgan Stanley has adjusted its view on the US dollar to neutral with a bullish skew and is advising clients to buy on dips. source
• Morgan Stanley recommends the Norwegian krone against the euro and the Swedish krona as an energy price hedge. source
• Morgan Stanley maintains a bearish outlook on the Japanese yen due to carry trade support. source