Good news is already priced in for USD says analysts

Barchart: Dump the U.S. Dollar cautions Morgan Stanley🚨

The investment bank’s analysts, however, said they believe “much of the ‘good news’ for USD” is in the price already, with investors having “largely internalized the ‘US outperformance’ narrative” that is driving the value of the dollar up.

Morgan Stanley’s analysts said they believe investors may also be “overestimating the speed, breadth and magnitude” of the shifts to U.S. trade policy brought in by Trump’s administration, which begins Jan. 20, 2025.

“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,” the analysts said.

The analysts said investors can now bet against the U.S. dollar by buying AUD/USD AUDUSD or GBP/USD GBPUSD.