GBP/USD: Morgan Stanley says sterling’s outperformance set to fade next year

Morgan Stanley strategist Michael Wilson expressed a bullish outlook for stocks in 2026, projecting the S&P 500 to reach 7,800. He emphasized the necessity for the Federal Reserve to implement rate cuts and highlighted the ongoing rally in AI stocks during an interview on Bloomberg Surveillance.

Morgan Stanley strategist Michael Wilson expressed concerns that the Federal Reserve is not acting swiftly enough in cutting interest rates, suggesting that further reductions are necessary. He anticipates a significant rally in the S&P 500, projecting it could reach 7,800 within a year, which is among the highest forecasts from Wall Street firms. Wilson shared these insights during an interview on Bloomberg Surveillance.

Morgan Stanley has forecasted a flat path for the EUR/NOK exchange rate, indicating that various mixed factors are influencing its stability. This projection reflects ongoing assessments of market conditions and economic indicators that could affect currency valuations in the near future.

Morgan Stanley has projected that the NZD/USD exchange rate is set to gain as New Zealand's economy shows signs of recovery, indicating a positive outlook for the currency pair. This forecast aligns with broader economic trends suggesting a rebound in economic activity.

Morgan Stanley has forecasted that the Swedish krona will outperform the US dollar in early 2026, indicating a potential shift in currency dynamics as economic conditions evolve. This prediction comes amid a backdrop of changing monetary policies and economic indicators that could influence exchange rates.

Morgan Stanley has projected an 8% rise in the AUD/USD exchange rate, attributing this forecast to strong economic fundamentals in Australia. This positive outlook reflects the firm's confidence in the Australian economy's resilience and growth potential.

Morgan Stanley has forecasted that the EUR/CHF currency pair will trade within a tight range due to competing economic forces. This prediction reflects the bank's analysis of current market conditions and potential fluctuations in the currency markets.

Morgan Stanley has projected that the USD/JPY exchange rate will decline to 140, reflecting ongoing market dynamics and currency fluctuations. This forecast comes amid a backdrop of economic pressures and changing monetary policies in Japan.