The dollar’s dominant status as the world’s reserve currency is likely to continue – Morgan Stanley

Morgan Stanley says the dollar’s dominant status as the world’s reserve currency is set to endure. This is partly because its credible challengers, such as the Chinese yuan, are rather lacking at the moment.

Although the dollar’s dominance at the top has sparked some concerns recently, Morgan Stanley says the greenback can still hold its own. This is despite concerns about US debt levels and some signs of diversification by reserve managers away from the dollar.

“We expect the dollar’s dominant reserve currency status to continue despite the ongoing challenges of an increasingly multipolar world. This supports our current preference for the dollar and should provide long-term support, even as periods of weakness are to be expected in terms of cyclical conditions and valuations.”