bobbyw24
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Goldman Calls For More US Dollar Pain
Joe Weisenthal|Oct. 15, 2009, 6:14 AM | 67 |
Now they're just kicking the poor greenback while it's down.
Bloomberg: Goldman Sachs Group Inc. said the dollar is likely to extend drops against the euro and commodity- backed currencies over the coming six months, based on the greenback’s correlation with cyclical assets and capital flows.
The dollar will weaken to $1.55 versus the euro in three and six months, the bank said, revising previous forecasts of $1.45 for both periods. The U.S. currency, which has fallen versus all of the 16 most-traded currencies this year, will recover to $1.35 in 12 months, Goldman Sachs said. The bank left its dollar-yen forecasts unchanged.
Of course, this is good news for equity investors, given the tight inverse correlation between stocks on the dollar. A surprise move higher, rather than a continued drift lower at the current pace is what would really sucker-punch this market.
http://www.businessinsider.com/goldman-calls-for-more-us-dollar-pain-2009-10
Dollar to Slide to $1.55 Versus Euro, Goldman Says (Update1)
By Candice Zachariahs
Oct. 15 (Bloomberg) -- Goldman Sachs Group Inc. said the dollar is likely to extend drops against the euro and commodity- backed currencies over the coming six months, based on the greenback’s correlation with cyclical assets and capital flows.
The dollar will weaken to $1.55 versus the euro in three and six months, the bank said, revising previous forecasts of $1.45 for both periods. The U.S. currency, which has fallen versus all of the 16 most-traded currencies this year, will recover to $1.35 in 12 months, Goldman Sachs said. The bank left its dollar-yen forecasts unchanged.
“It now looks as though the dollar trough will be slightly deeper,” analysts including Thomas Stolper in London, New York- based Mark Tan and Hong Kong’s Fiona Lake wrote in a note to clients yesterday. “The underlying longer-term view is that the dollar is undervalued and will recover somewhat.”
The currency fell to $1.4953 versus the euro as of 12:27 p.m. in Tokyo after touching $1.4960, the weakest since August 2008. It has declined 7 percent against Europe’s single currency this year.
The U.S. dollar will begin to recover some ground over 12 months as household savings rise and foreign investors regain confidence in the U.S. economy, Goldman Sachs predicts.
“We don’t expect the euro to make significant new historical highs above $1.60,” the analysts wrote. “In fact, we would expect policy makers to become very vocal about excessive dollar weakness when we approach these levels.”
‘No Alternative’
European Central Bank President Jean-Claude Trichet said Oct. 8 that a
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agpNwhJkUAHc
Joe Weisenthal|Oct. 15, 2009, 6:14 AM | 67 |
Now they're just kicking the poor greenback while it's down.
Bloomberg: Goldman Sachs Group Inc. said the dollar is likely to extend drops against the euro and commodity- backed currencies over the coming six months, based on the greenback’s correlation with cyclical assets and capital flows.
The dollar will weaken to $1.55 versus the euro in three and six months, the bank said, revising previous forecasts of $1.45 for both periods. The U.S. currency, which has fallen versus all of the 16 most-traded currencies this year, will recover to $1.35 in 12 months, Goldman Sachs said. The bank left its dollar-yen forecasts unchanged.
Of course, this is good news for equity investors, given the tight inverse correlation between stocks on the dollar. A surprise move higher, rather than a continued drift lower at the current pace is what would really sucker-punch this market.
http://www.businessinsider.com/goldman-calls-for-more-us-dollar-pain-2009-10
Dollar to Slide to $1.55 Versus Euro, Goldman Says (Update1)
By Candice Zachariahs
Oct. 15 (Bloomberg) -- Goldman Sachs Group Inc. said the dollar is likely to extend drops against the euro and commodity- backed currencies over the coming six months, based on the greenback’s correlation with cyclical assets and capital flows.
The dollar will weaken to $1.55 versus the euro in three and six months, the bank said, revising previous forecasts of $1.45 for both periods. The U.S. currency, which has fallen versus all of the 16 most-traded currencies this year, will recover to $1.35 in 12 months, Goldman Sachs said. The bank left its dollar-yen forecasts unchanged.
“It now looks as though the dollar trough will be slightly deeper,” analysts including Thomas Stolper in London, New York- based Mark Tan and Hong Kong’s Fiona Lake wrote in a note to clients yesterday. “The underlying longer-term view is that the dollar is undervalued and will recover somewhat.”
The currency fell to $1.4953 versus the euro as of 12:27 p.m. in Tokyo after touching $1.4960, the weakest since August 2008. It has declined 7 percent against Europe’s single currency this year.
The U.S. dollar will begin to recover some ground over 12 months as household savings rise and foreign investors regain confidence in the U.S. economy, Goldman Sachs predicts.
“We don’t expect the euro to make significant new historical highs above $1.60,” the analysts wrote. “In fact, we would expect policy makers to become very vocal about excessive dollar weakness when we approach these levels.”
‘No Alternative’
European Central Bank President Jean-Claude Trichet said Oct. 8 that a
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agpNwhJkUAHc
