• Morgan Stanley note that local equity markets strengthened across the board recently, which suggests that the USD should weaken against most currencies in the G10 in the final week of the month.
  • They add that local equity returns in G10 are linked to appreciating local currencies versus USD in the last week of the month, possibly due to asset manager flows.
  • Their signal suggests that USD should weaken versus most currencies in the G10 (except CHF) for the second consecutive month.
  • MS conclude “Last month, the dollar weakened against most G10 currencies at month-end in line with the signals from our model. The strategy posted the biggest monthly gain since we started publishing our monthly updates (+0.8%).”

Morgan Stanley Month-End Model Signals USD Weakness

Last updated at:Aug-25 11:34By: Edward Hardy
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  • Morgan Stanley note that local equity markets strengthened across the board recently, which suggests that the USD should weaken against most currencies in the G10 in the final week of the month.
  • They add that local equity returns in G10 are linked to appreciating local currencies versus USD in the last week of the month, possibly due to asset manager flows.
  • Their signal suggests that USD should weaken versus most currencies in the G10 (except CHF) for the second consecutive month.
  • MS conclude “Last month, the dollar weakened against most G10 currencies at month-end in line with the signals from our model. The strategy posted the biggest monthly gain since we started publishing our monthly updates (+0.8%).”

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