Morgan Stanley: the real exchange rate of the dollar may drop to 7% next year

Morgan Stanley analyst, drew attention to the fact that the ratio of U.S. current account to GDP, unemployment, budget deficit ratio to GDP, in order of importance, are the most important factors in the overall dynamics of the U.S. dollar. As noted in the bank, if you look at data from 1974, the current indicators point to a 91-percent probability of reducing the real exchange rate of U.S. dollar by 7 percent or more over the next year. However, that decline is likely to be controlled, in part due to the fact that U.S. currency has no real rival for the role of reserve currency - given the amount of liquidity, asset markets in the euro area is still lagging behind the U.S., as a consequence, the economies of Eurozone harder to absorb large inflows of additional capital. In addition, add in the bank, nobody is interested in the crisis of the U.S. dollar, which may lead to the adoption, where appropriate, coordinated action to avoid the occurrence of such events.