Morgan Stanley Sees $200 Billion in Hedging Boosting Euro

The euro could climb to levels last seen five years ago as a drop in hedging costs would drive flows of more than $200 billion and prop up the currency, according to Morgan Stanley.

BL Bloomberg MarketsUpdated 12h ago1 min read

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May 15, 2026 at 4:12 PM UTC

Updated on May 15, 2026 at 7:21 PM UTC

The euro could climb to levels last seen five years ago as a drop in hedging costs would drive flows of more than $200 billion and prop up the currency, according to Morgan Stanley.

High US interest rates have long been a prohibitive factor for European investors looking to hedge their dollar exposure, since they effectively have to pay away that yield advantage when buying euros, and selling the greenback, forward.

Extracted and lightly reformatted for readability. · Source: pt