The US dollar strengthened, as positive data on the US economy led to increased expectations of rate hikes by the Federal Reserve. However, Morgan Stanley, still prefer to sell the US currency.

Growing expectations of tighter monetary policy at this time were relatively weak, "so the dollar did not demonstrate a significant gain," says the investment bank.

In addition, Morgan Stanley indicate "ongoing outflow of funds in higher-yielding currencies and assets" that usually occurs in part due to the dollar.