EUR/USD: Morgan Stanley's euro and dollar forecast for this week

As usual, you will find Morgan Stanley's weekly forecasts for the euro and the dollar for the week of 15 February 2016:

EUR: Bearish view

"If the tactical rally that we expect occurs, it will put pressure on the EUR/USD once again. This would diminish the inflation expectations in the euro area, with implications regarding the likelihood of further easing in March. It must also be noted that the EUR/USD remains inversely correlated to stocks, a factor that should be taken into account this week."

USD: Bullish view

"We expect risk appetite to rise again this week, which should support the USD against funding currencies, including the EUR. Of course, it will be important to keep an eye on the tightening of financial conditions, which have an impact on the Fed's decisions. That said, even if US news can move the USD around during its substantive long-term trend, it cannot reverse this trend in our opinion."