In its latest client note, the economists at Goldman Sachs predict the US dollar to weaken next, adding that the reason behind the weakness should not come as a surprise.
Key Quotes:
“US dollar will weaken in 2020 and beyond if global growth rebounds and the flight-to-quality premium in the dollar fades.
Current assessment of the economy sees relatively low growth but no signs of rising unemployment.
Global growth will rebound next year.
Deceleration since late-2017 will prove to be a mid-cycle slowdown, not a recession.
If downside risks materialize, history suggests the USD could remain firm.
Even alongside deeper rate cuts from the Fed.
Pattern of dollar strength during recessions holds despite the fact that the Fed usually continues cutting rates.”
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