Goldman Sachs Predicts Dollar Weakening
Goldman Sachs projects the US dollar will continue to weaken in the coming months. According to analysts, the weakening economic and market performance makes it unjustifiably high for the dollar to remain. However, the dollar's position as the world's leading currency is expected to remain for quite some time.
In a note from the strategy team led by Kamakshya Trivedi, Goldman believes the dollar's global dominance will slowly erode. Changes in fiscal policy in Europe that support growth, as well as a strong Chinese export sector, are expected to provide a boost to the euro and yuan.
However, the report also emphasizes that concrete evidence of de-dollarization remains limited. The dollar still dominates global debt issuance, cross-border transactions, and foreign exchange trading volume in the spot market. This means that, despite the weakening trend, the dollar's role remains difficult to replace in the near term.
Looking ahead, Goldman predicts the dollar will underperform other cyclical assets. This is because the global economic outlook is considered increasingly balanced, with portfolio investment flows more distributed across regions outside the United States. (ads)
Source: Bloomberg.com
