Dollar’s “historic rally is not quite over” — Goldman Sachs

Forex

Goldman Sachs on the US dollar

Goldman Sachs on the US dollar

Goldman Sachs doesn’t think the dollar rally is over yet.

In another equity decline, they expect the dollar to rise 3-5% on a trade-weighted basis. That would put the dollar in line with its 2002 highs, or close.

They are watching two charts in particular — EUR/USD and USD/CAD — for signs of disorderly moves that might prompt intervention or serious talk of it.

“While there is still a reasonably strong argument for a V-shaped recovery, with policy makers working hard to bring about that outcome, without medical breakthroughs the next few weeks could be challenging for markets as they price in a deep global recession,” Goldman Sachs writes.

More broadly, they argue to stay cautious and buy USD, JPY and CHF while avoiding emerging market currencies. They think ZAR and RUB could be particularly hard hit.

ForexLive

Let’s block ads! (Why?)

Forexlive RSS Breaking news feed

Leave a Reply

Your email address will not be published. Required fields are marked *