27 September 2022 | Other

Strengthening dollar may lead to financial crisis

The recent rally in the US dollar creates an "unacceptable situation" for riskier assets, which could lead to a financial or economic crisis, Morgan Stanley strategists warned.

Sharp currency fluctuations are another pressure on the global economy and corporate earnings, which are expected to fall as the Federal Reserve's aggressive interest rate hike in the summer begins to take its toll on spending.

"The ultimate stock lows and yield highs are likely to be determined by the trajectory of earnings and economic growth, not inflation or the Fed," analysts, including Michael Wilson of Morgan Stanley, wrote.

The firm notifies the pressure from the dollar rally will help push the S&P 500 to a new bear market low between 3,000 and 3,400 by early 2023.

Company MarketCheese
Period: 30.04.2026 Expectation: 400 pips
Investing in Brent crude upon breaking above $101 per barrel
Yesterday at 11:09 AM 34
Period: 24.04.2026 Expectation: 680 pips
USDCAD hits new three-week low amid weaker demand for dollar
Yesterday at 10:28 AM 29
Period: 30.06.2026 Expectation: 5200 pips
Selling GBPUSD down to 1.30000
Yesterday at 07:02 AM 31
Period: 24.04.2026 Expectation: 1050 pips
AUDCAD drops due to rising stagflation risks in Australia
Yesterday at 06:56 AM 21
Period: 30.04.2026 Expectation: 1100 pips
Investing in USDJPY with 160.00 in view
16 April 2026 52
Gold sell
Period: 23.04.2026 Expectation: 20000 pips
Selling gold with $4,630 in sight amid monthly highs and declining volatility
16 April 2026 72
Go to forecasts