Goldman Sachs believes that the dollar will not fall sharply in 2020, only a mild depreciation
In its 2020 global macro outlook, Goldman Sachs said that the steady growth of the US economy will prevent the dollar from falling sharply; even from a continuous perspective, there are many reasons not to be optimistic about the US dollar, but strategists "are expected to be at least not widely available at least in early 2020." Short-selling strategists such as Zach Pandl said in the report, "it can be said that the risk of the dollar is biased downwards." If the euro zone economy has a stronger recovery, the United States is expanding its quota to increase tariffs, the Fed may further cut interest rates, then the strategist will "turn." More bearish "US dollars.
Goldman Sachs said that the US dollar has two components: one is the “domestic dollar” like the common currency, and the other is the “international dollar” that reflects its global pattern. The global economic growth rebound next year will bring some downward pressure on the “international dollar”. And the driving factor of “domestic dollar” seems to be more positive. Taken together, these factors predict that “the increase in the US dollar trade rate will only have a moderate depreciation of approximately 1.5%-2.0% in 2020”. Regarding the G-10 currency, Goldman Sachs is the most bullish in the first quarter of 2020, as the election results are expected to pave the way for Brexit.
Danske Bank: Euro is expected to be low for a longer period
Given that there are signs that the Fed will temporarily put aside interest rate cuts, it is expected that the euro will remain at a low level for a longer period. It is expected that the Fed will only cut interest rates again in the next 3-6 months (previously expected to cut interest rates three times). Given that the Fed has now completed interest rate cuts, the euro is expected to fall to 1.09 against the dollar in the near term, and the euro will rebound to 1.11 in six months as the Fed resumes easing measures.
If global economic growth picks up and inflation differentials provide potential support, the euro is expected to rise further to 1.13 against the dollar. A key factor in whether Europe is strong is whether European governments adopt a proactive fiscal policy, but there is no plan yet.