Goldman Sachs's views via its macroeconomic outlook report for 2019
- Sees a broad fall in the dollar next year as US economic growth slows to be more in line with the global average
- Combined with a few negative medium-run factors, this points to more downside than upside for the dollar next year
- Most near-term upside among major currencies are tipped to be the Canadian dollar, Australian dollar, New Zealand dollar
- Says that Latin American currencies should outperform its emerging market peers next year; Chilean peso having the best scope to rise
Some market colour there as provided by Goldman Sachs. There are a couple of reasons to be bearish in the dollar next year and the growth story cited may well just be one of it. There's still the issue of the massive twin deficits, the Fed eventually reaching a rate hike ceiling and pausing the tightening cycle, and long positions are awfully stretched right now.
However, as always in cases like this, markets will take things one at a time and when the spotlight starts to shift its focus on the main issues above, that's when we as traders should start paying attention too. But for now, there's no harm in keeping this at the back of your mind.
