Title-chasing City head to Old Trafford as favourites with Premier League champions United languishing in seventh.
"United had lots and lots of seasons of domination," Moyes said. "I don't think I would have turned around and said we were the only club in Manchester because football changes, it goes in cycles."
City are six points off leaders Chelsea with a game in hand while United are looking to avoid back-to-back home humiliations in the league following their 3-0 drubbing by title-chasing Liverpool.
United are effectively fighting only for pride but Moyes insists they will be battling City for the top players in the transfer market in the summer before competing with them for trophies.
He said: "This club has a spending power, too. I've not been told at any time that they don't have that and I think the club will compete."
Moyes suffered a humiliating 4-1 defeat at the Etihad Stadium on his Manchester derby debut in September.
Yet that setback and the 12-point gap between the two sides has not convinced Moyes that United trail their neighbours in terms of quality.
"It's important to show the level of what we have -- we're not as far away as many would have us," he said. "I've no doubt it will improve and I want us to show we are still in there fighting. Obviously it means a lot more to supporters and in the city if you win a derby game."
Moyes should welcome back defenders Jonny Evans (calf) and Rio Ferdinand (back) from injury after they sat out the 2-0 win at West Ham on Saturday. Chris Smalling (hamstring) remains a doubt.
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