Morgan Stanley says de-dollarization fails, "dollar is still smiling"

Although the dollar will fall 11% in 2025 and there are concerns about de-dollarization, Morgan Stanley insists that its "dollar smile" framework remains valid. The theory was proposed in 2001, indicating that the dollar will strengthen during a period of global economic growth panic or the US economy performs well. Recent geopolitical tensions and trade frictions have confirmed the resilience of the dollar, and strategist Andrew Watrus stressed that the root cause of the recent weakness in the dollar is policy uncertainty rather than concerns about growth. The bank insists that the framework can withstand market pressure and expects the dollar to strengthen during market volatility.