Morgan Stanley's Dollar/TL forecast

While updating its currency forecasts, Morgan Stanley projected a more moderate decline in the dollar index and a flatter trajectory for emerging market currencies. The institution, which previously forecast the dollar index at 101 for the end of 2025, has revised this estimate to 103. The bank also updated its expectations for the euro/dollar pair for the third and fourth quarters of 2025.

Accordingly, Morgan Stanley, which had previously forecast 1.09 for the third quarter, has revised this estimate to 1.08. The forecast for the fourth quarter, previously 1.10, has been revised to 1.08. According to a report by Bloomberg, the bank's year-end expectation for the pound/dollar pair has also been lowered from 1.34 to 1.30.

The analysis stated that the likelihood of the Fed supporting short positions on the dollar is low, and noted that while three interest rate cuts were projected for 2025 last year, this has been reduced to an expectation of one rate cut in the current assessment.

Morgan Stanley expects the dollar/TL rate to be at 41 by the end of this year and 44 by the end of 2026.

In the institution's report dated February 14, it was stated, “Our forecasts indicate that the Turkish lira will be among the best-performing currencies in the CEEMEA region.”

The institution's dollar/TL forecasts are as follows:

News Source: 12punto