Morgan Stanley: If U.S. inflation is lower than expected, the dollar may decline

Jinse Finance reported that Morgan Stanley strategists stated in a report that, historically, after a strong non-farm payroll report, if inflation data comes in below expectations, it tends to trigger the largest decline in the US dollar. "In this scenario, the dollar's drop suggests that strong US growth signals, when not accompanied by rising inflationary pressures, create a 'Goldilocks' combination for risk appetite." These strategists noted that this would support risk-sensitive currencies strengthening against the dollar. They also indicated that the inflation swap market suggests the January inflation report, scheduled for release at 13:30 GMT, may come in below expectations. Prior to this, Wednesday's non-farm payroll data exceeded expectations. The DXY US Dollar Index recently rose by 0.15%, quoted at 97.07.