The Goldman Sachs comments are in a short Bloomberg article (Bloomberg is gated). In summary Goldman Sachs argue that there is likely more room for dollar strength in the near term “than what the market is pricing”
- “Ultimately, we think total dollar depreciation for the year is more constrained than commonly believed.”
- “The dollar is likely to decelerate only slowly from the peak, with a number of bumps along the way, because slack in the economy remains limited so policymakers will have to keep one foot on the brake”
GS say growth in Europe and China has been disappointing:
- “Dollar depreciation is typically associated with strong growth in the rest of the world, not weak growth in the US. We are still waiting for a challenger, and the euro is not stepping into the role yet.”
GS add that credit conditions in the US have not tightened as much as feared initially.
(This
chart is from our charting app, which is free and can
be found at this link)