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13 Sep 2013
Flash: EUR/USD year-end outlook improves to 1.4000 – Goldman Sachs
FXstreet.com (Lisbon) - According to the Goldman Sachs Research Team, we revise our EUR/SD forecasts to 1.38 (3 months), 1.40 (6 months) and 1.40 (12 months).
Key quotes
“There is a specific motivation for our FX View, as our forecasts imply a modest weakening in the broad Dollar index. The large structural deficits in the US balance of payments and government budget and the reduction of the Euro area risk premium should both contribute to a weaker Dollar against the Euro. Monetary policy is likely to remain accommodative.”
However, “the announcement of the first tapering of asset purchases, which we expect at the September FOMC, may provide support to the Dollar through higher bond yields, particularly against EM currencies. That said, in our view, the acceleration in US and global activity through the end of 2013 (our forecast) is likely to lead to USD weakness in the longer-term.”
Key quotes
“There is a specific motivation for our FX View, as our forecasts imply a modest weakening in the broad Dollar index. The large structural deficits in the US balance of payments and government budget and the reduction of the Euro area risk premium should both contribute to a weaker Dollar against the Euro. Monetary policy is likely to remain accommodative.”
However, “the announcement of the first tapering of asset purchases, which we expect at the September FOMC, may provide support to the Dollar through higher bond yields, particularly against EM currencies. That said, in our view, the acceleration in US and global activity through the end of 2013 (our forecast) is likely to lead to USD weakness in the longer-term.”