I posted forecasts from GS yesterday here: Goldman Sachs revise their 12-month EUR/USD forecast to 1.28 (from 1.25)
Goldman Sachs are looking for further USD weakness in a 12 month horizon. Analysts cite
- faster-than-expected FX in past weeks towards GS' existing 12 month targets
- December FOMC meeting in the past now
GS say they had viewed the December FOMC as a key risk (of an early pivot to less dovish) but that did not come to fruition:
- " ... the latest FOMC meeting, the first since effective vaccines were confirmed, raised our confidence that the committee is a very long way from tightening, due to subdued structural inflation trends"
GS still looking for USD falls ahead, citing:
- a still overvalued USD following "a long stretch of U.S. asset market outperformance”
- erosion of carry following Fed rate cuts
- Fed’s average inflation targeting framework
- a recovering global economy
(Hmmm .... None of those are new developments and may well thus test the GS 12 month view)
