With the BRICS bloc bringing forth a renewed de-dollarization revolution over the past two years, Morgan Stanley has recently stated its belief that it’s “time to sell” the US dollar. Indeed, the greenback has become a center of geopolitics in recent months. US President-elect Donald Trump has threatened 100% tariffs on nations looking to ditch the world currency.
The move is rooted in the commitment to maintaining the status of the dollar. However, increased sanctions from the West drove Russia and its BRICS allies to embrace alternative trade settlements. Now at a crossroads, the investment bank has given its opinion on the currency’s outlook.
Source: LA Times
Also Read: Expert Says Nations Will Eventually Ditch US Dollar Reserves for Bitcoin
Morgan Stanley Says Bullish Investors Mean Its Time to Sell The Dollar
With the impending return of Donald Trump to the White House, the US dollar has once again become a focus. During his campaign for reelection, Trump said that losing the greenback as the world’s currency would be akin to “losing a war.” Moreover, he is expected to take significant steps regarding his policy to uphold its position and value.
Although that has led to increased bullishness, one investment bank isn’t buying in. Amid BRICS de-dollarization, Morgan Stanley has assured it is “time to sell,” the US dollar. The bank recently released a note on the belief that the dollar’s value is expected to increase. However, they are also rooted in misunderstood expectations.
Source: Watcher Guru
Also Read: The US Dollar’s Clout is Decreasing Globally, BRICS Says
The bank’s analysts believe “much of the ‘good news’ for USD” is already priced in, according to a Market Watch report. Moreover, they state investors are “overestimating the speed, breadth, and magnitude” of US policy shifts that are poised to take place under Trump.
“While trade policy announcements could come relatively quickly, their implementation is likely to be slower and their scope narrower than many investors seem to expect, with trade restrictions largely focused on China,” they added.
The prediction provides an interesting wrinkle to the ongoing geopolitical dilemma. Trump’s trade policies are expected to drive inflation up and could limit the dollar’s value. Altogether, it could drive more de-dollarization efforts across the globe.
