Morgan Stanley's buy-the-dips approach suggests that any dollar weakness may prove short-lived, especially if energy prices or risk aversion rise again. The bearish yen view keeps USD/JPY near the upper end of its range in focus, where the risk of Japanese intervention rises, particularly with US officials flagging yen weakness. Favouring the krone over the euro and Swedish krona ties FX positioning directly to the oil outlook, making Norwegian currency a beneficiary if Middle East supply concerns flare again. For the euro, the call adds to pressure from widening French spreads and Europe's exposure to energy costs.---Two weeks after admitting it was wrong on the dollar, Morgan Stanley has dialled its bullish call back to "buy the dips", while sticking with the trades that work in an energy shock.Summary:Morgan Stanley's view on the US dollar is now neutral with a bullish skew, and it is looking for dips to buy.The bank remains bearish on the yen, saying carry trades are likely to keep supporting USD/JPY.It favours long Norwegian krone positions against the euro and Swedish krona as a hedge against higher energy prices.In late September, its strategists admitted their weak-dollar forecast had been wrong and raised their dollar forecasts.A weak September US payrolls report has since cut expectations for an October Fed hike.Morgan Stanley has moved to a neutral view on the US dollar with a bullish skew, saying it is looking for dips to buy, while staying bearish on the Japanese yen and favouring the Norwegian krone against the euro and Swedish krona as a hedge against higher energy prices.The stance marks a step back from the more outright dollar-bullish view the bank's currency strategists adopted less than two weeks ago. In a note in late September, a team led by David Adams conceded that their earlier forecast of a weaker dollar had been wrong. They had expected US interest rates to converge with those abroad as the Federal Reserve stayed on hold, but elevated energy prices, robust US data and a more hawkish Fed instead pushed markets to price rate hikes, lifting the dollar.At the time, the bank raised its year-end forecast for the dollar index to 102 and cut its euro forecast to 1.12 against the dollar, while projecting further dollar gains into mid-2027 as fiscal and political concerns weighed on Europe.Much has changed since. A weak September US payrolls report last week sharply reduced expectations for an October Fed hike, removing some of the near-term support behind the dollar rally. The latest neutral stance with a bullish bias appears consistent with that shift, keeping the broader case for dollar strength intact while favouring buying on weakness rather than chasing gains.The yen view is a continuation of the bank's existing position. In late September, Morgan Stanley recommended holding long dollar-yen positions from around 158, targeting 163, and said dollar gains would come mainly against low-yielding currencies used to fund carry trades, such as the yen, euro and Swiss franc. The wide interest rate gap between the US and Japan continues to make borrowing in yen attractive to fund higher-yielding bets.The krone call reflects Norway's position as a major energy exporter. A stronger krone tends to accompany higher oil and gas prices, while the euro and Swedish krona are more exposed to rising energy import costs, making the trade a hedge against further energy shocks.Morgan Stanley has also warned that dollar long positions could be forced out by sudden shocks, including intervention to support the yen. This article was written by Eamonn Sheridan at investinglive.com.