Morgan Stanley cuts year-end dollar forecast

(Reuters) - Morgan Stanley cut its 2023 year-end forecast for the dollar index to 98, and expects the greenback's weakness to be more pronounced against the euro this year as worries about the severity of an economic downturn start to ease.

"Global growth is showing signs of buoyancy, macro and inflation uncertainty are waning and the USD is rapidly losing its carry advantage," said currency strategists at Morgan Stanley led by James K Lord, in a note published late on Sunday.

They previously saw the dollar index, which weighs the greenback against a basket of six major rivals, ending 2023 at 104.

The Wall Street bank now sees the euro strengthening to 1.15 by year-end versus a previous forecast of 1.08.

(Reporting by Susan Mathew in Bengaluru; Editing by Toby Chopra)