Morgan Stanley is forecasting a significant decline in the U.S. dollar, projecting the Dollar Index to fall nearly 10% over the next year—from around 99 to 91. The firm points to expected Federal Reserve rate cuts, a slowing U.S. economy, and stronger foreign currencies as key drivers behind the anticipated drop.
U.S. GDP growth is expected to slow to just 1% in both 2025 and 2026, weighed down by tariffs, tighter immigration policies, and limited government spending. Meanwhile, global currencies like the euro, pound, and yen are all expected to gain ground against the dollar.
The bank also sees 10-year Treasury yields settling around 4% by year-end, with additional rate cuts likely in 2026.
At Allenhouse Metals, we see dollar weakness as a strong case for increasing exposure to physical gold and silver—proven stores of value when currency confidence erodes.
