The breakdown from currency analysts at Morgan Stanley:
USD: Not a US Story. Bullish.
Dollar strength continues to be driven more by what is happening outside the
US rather than what’s happening in it. Ongoing stresses and uncertainties in
emerging markets are weakening most currencies against USD. ECB President
Draghi’s dovish statement is turning USD strength more broad-based. In the end,
global capital should flow to the US which offers the best risk-adjusted return.
While domestic growth is soft, we are not expecting a US recession.