Goldman Sachs cut its EUR/USD forecasts (by not very much)

Posting as an ICYMI, Goldman Sachs expect the US dollar to be “stronger for longer.”


  • upgrades to already-robust US growth forecasts
  • therefore the FOMC will cut rates later and more gradually
  • most other developed market economies will begin their rate cutting cycle sooner with sequential rate cuts
  • U.S. election should limit portfolio flows to other jurisdictions when both candidates have proposed more fiscal support and trade restrictions

GS says:

  • “This opens some policy divergence in our baseline outlook, which leans in the direction of a ‘stronger for longer’ U.S. Dollar”
  • “Importantly for FX, the rate cuts we anticipate are unlikely to be significantly negative for the Dollar because they are unlikely to erode the Dollar’s position as a relatively high carry, safe-haven currency with strong capital return prospects.”

EUR/USD forecasts

  • $1.05 in three months, $1.05 in six months and $1.08 in a year
  • from $1.08, $1.10 and $1.12 respectively

This article was written by Eamonn Sheridan at Source