A note from economists at GS, their reasoning should not come as a surprise although you may not agree with the forecast
- US dollar will weaken in 2020 and beyond if global growth rebounds and the flight-to-quality premium in the dollar fades
Well, yeah.
GS current assessment of the economy:
- relatively low growth
- but no signs of rising unemployment
OK, now to the projections:
- global growth will rebound next year
- deceleration since late-2017 will prove to be a mid-cycle slowdown, not a recession
And, finally, the 'but if':
- 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
