"In a soccer match of 90 minutes, we think we are in the 80th minute of decline of the dollar against most of the major currencies," Darst said on "Worldwide Exchange."
But another sharp drop in financials would lead to further selling for the dollar if the Federal Reserve was forced into more interest rates cuts, Darst said.
In addition, Morgan Stanley believes there could be gains in store for some of the Asian currencies versus the dollar, he said.
'Long, Grinding Erosion'
Despite the bullish view on the dollar, Darst told CNBC that the current bear market is far from over and is now entering a painful third stage of "long grinding erosion, which takes several months."
Comparing the current market turmoil to previous bear-market periods, Darst said that there are significant falls for stock markets still to come over the second half of the year.
"For the market as a whole we have not seen that capitulatory, cathartic purging that often spells the very final bottom," Darst said.
With the tail end of the market slump yet to happen, Morgan Stanley Global Wealth Management Group is keeping its portfolio firmly defensive with a 4 percent allocation to commodities, 16 percent in cash and some inflation-protected securities, which adjust upward as inflation goes higher.