Goldman Sticks With Strong Dollar Call on Outlook for Rate Moves
by
Bloomberg News
Goldman Sachs Group Inc., one of the world’s top 10 foreign-exchange traders, is holding fast to its bullish-dollar stance, unmoved...
Goldman Sachs Group Inc., one of the world’s top 10 foreign-Exchange traders, is holding fast to its bullish-dollar stance, unmoved by the currency’s recent slide.
A gauge of the U.S. currency advanced for a second day, paring a 3.6 percent drop in March that would be the measure’s worst monthly performance since April 2011. Economists at Goldman predict stronger economic outcomes will force the Federal Reserve policy makers to raise interest rates three times this year, supporting the greenback further. The central bank signaled last week it plans two interest-rate increases by Dec. 31, prompting banks such as Morgan Stanley to highlight the risk of near-term dollar weakness.
U.S. policy makers are scrutinizing reports for signs the domestic economy is withstanding their first interest-rate increase in almost a decade amid a slowdown in global growth. Officials stayed on hold at their March 15-16 meeting, citing overseas developments as a risk to their outlook, and lowered their projections for higher rates. The nation remains one of the few to be raising borrowing costs, with Europe and Japan deploying stimulus and negative rates to foster economic expansion.
“The underlying case for the divergence trade is stronger, not weaker, given that a dovish Fed will spur U.S. outperformance versus the euro zone and Japan,” wrote Goldman analysts led by Robin Brooks, the New York-based head of currency strategy. “Going up is hard to do, but the dollar will go up.”
The Bloomberg Dollar Spot Index, which tracks the currency versus 10 peers, added 0.2 percent to 1,188.63 as of 3:01 p.m. in New York. The greenback gained 0.3 percent to 111.86 yen, up from 110.67 on March 17, its lowest since October 2014. It climbed 0.2 percent to $1.1252 per euro.
‘Appreciation Pressure’
The “underlying appreciation pressure is large” for the dollar, the Goldman analysts wrote. Their forecasts for Fed tightening would suggest a 15 percent appreciation in the U.S. currency, they said.
Goldman sees the dollar climbing to 95 U.S. cents versus the euro within 12 months, Brooks wrote in a separate note March 11. Goldman revived that forecast in January, less than two months after a thwarted call for the common currency to plunge after the European Central Bank’s December meeting -- it jumped the most since 2009 -- prompted a revision.
The market’s expectations for the dollar are more subdued. Hedge funds and other large speculators reduced bets on dollar gains versus eight major currencies to the lowest since mid-2014 in the week to March 15. The so-called net longs dropped to 88,214 contracts, according to the Commodity Futures Trading Commission in Washington.
Speculators’ Bets
Traders put the chances of a rate increase in June at 42 percent, according to futures data compiled by Bloomberg. The odds of a single 25-basis-point move by December are at 73 percent. The calculation assumes the effective fed funds rate will average 0.625 percent after the Fed’s next increase.
Standard Bank Group Ltd. predicts that the setback in the U.S. currency’s long-term advance will be temporary. The bank sees the greenback rising for about another year, and strengthening to $1.10 per euro, 115 yen and $1.38 per pound in the next six months.
“The greenback has not become significantly overvalued against other advanced-country currencies,” said Steve Barrow, head of Group-of-10 strategy at Standard Bank in London. “What’s more, we’re still in the early stages of the Fed’s tightening cycle.”
(An earlier version of the story was corrected to fix the low for the yen.)
--With assistance from Angie Lau Netty Ismail and Rachel Evans To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net, Anchalee Worrachate in London at aworrachate@bloomberg.net. To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net, Paul Cox, Michael Aneiro
Goldman Sachs Group Inc., one of the world’s top 10 foreign-Exchange traders, is holding fast to its bullish-dollar stance, unmoved by the currency’s recent slide.
A gauge of the U.S. currency advanced for a second day, paring a 3.6 percent drop in March that would be the measure’s worst monthly performance since April 2011. Economists at Goldman predict stronger economic outcomes will force the Federal Reserve policy makers to raise interest rates three times this year, supporting the greenback further. The central bank signaled last week it plans two interest-rate increases by Dec. 31, prompting banks such as Morgan Stanley to highlight the risk of near-term dollar weakness.
U.S. policy makers are scrutinizing reports for signs the domestic economy is withstanding their first interest-rate increase in almost a decade amid a slowdown in global growth. Officials stayed on hold at their March 15-16 meeting, citing overseas developments as a risk to their outlook, and lowered their projections for higher rates. The nation remains one of the few to be raising borrowing costs, with Europe and Japan deploying stimulus and negative rates to foster economic expansion.
“The underlying case for the divergence trade is stronger, not weaker, given that a dovish Fed will spur U.S. outperformance versus the euro zone and Japan,” wrote Goldman analysts led by Robin Brooks, the New York-based head of currency strategy. “Going up is hard to do, but the dollar will go up.”
The Bloomberg Dollar Spot Index, which tracks the currency versus 10 peers, added 0.2 percent to 1,188.63 as of 3:01 p.m. in New York. The greenback gained 0.3 percent to 111.86 yen, up from 110.67 on March 17, its lowest since October 2014. It climbed 0.2 percent to $1.1252 per euro.
‘Appreciation Pressure’
The “underlying appreciation pressure is large” for the dollar, the Goldman analysts wrote. Their forecasts for Fed tightening would suggest a 15 percent appreciation in the U.S. currency, they said.
Goldman sees the dollar climbing to 95 U.S. cents versus the euro within 12 months, Brooks wrote in a separate note March 11. Goldman revived that forecast in January, less than two months after a thwarted call for the common currency to plunge after the European Central Bank’s December meeting -- it jumped the most since 2009 -- prompted a revision.
The market’s expectations for the dollar are more subdued. Hedge funds and other large speculators reduced bets on dollar gains versus eight major currencies to the lowest since mid-2014 in the week to March 15. The so-called net longs dropped to 88,214 contracts, according to the Commodity Futures Trading Commission in Washington.
Speculators’ Bets
Traders put the chances of a rate increase in June at 42 percent, according to futures data compiled by Bloomberg. The odds of a single 25-basis-point move by December are at 73 percent. The calculation assumes the effective fed funds rate will average 0.625 percent after the Fed’s next increase.
Standard Bank Group Ltd. predicts that the setback in the U.S. currency’s long-term advance will be temporary. The bank sees the greenback rising for about another year, and strengthening to $1.10 per euro, 115 yen and $1.38 per pound in the next six months.
“The greenback has not become significantly overvalued against other advanced-country currencies,” said Steve Barrow, head of Group-of-10 strategy at Standard Bank in London. “What’s more, we’re still in the early stages of the Fed’s tightening cycle.”
(An earlier version of the story was corrected to fix the low for the yen.)
--With assistance from Angie Lau Netty Ismail and Rachel Evans To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net, Anchalee Worrachate in London at aworrachate@bloomberg.net. To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net, Paul Cox, Michael Aneiro
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔