Bloomberg News

Euro Year-End Forecast Reduced to $1.30 by Morgan Stanley

September 13, 2011

(Adds previous forecast starting in first paragraph.)

Sept. 13 (Bloomberg) -- Morgan Stanley reduced its year-end forecast for the euro to $1.30, from $1.36, the firm said in a research note today.

The New York-based bank estimated the shared currency will trade at $1.25 by the end of the first quarter of 2012, compared with a previous estimate of $1.38, citing economic-weakening concern from European Central Bank President Jean-Claude Trichet, the resignation of Juergen Stark from the central bank’s executive board and deteriorating fundamentals. The euro will stabilize in the second half of next year, analysts led by Gabriel de Kock, head of foreign-exchange strategy in New York, wrote to clients.

Morgan Stanley was the 10th biggest currency trader by market share in a survey published in May by Euromoney Institutional Investor Plc.

The 17-nation currency was little changed at $1.3678. It fell toward its weakest level in a decade against the yen today, trading at 105.19 yen. It touched 103.90 yesterday, the lowest since June 2001.

--Editors: Paul Cox, Greg Storey

To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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