Goldman Sachs ditches call for euro below $1.00 next year
LONDON: Goldman Sachs, one of the most bearish investment banks on the outlook for the euro, ditched its call on Friday for the single currency to fall below $1.00 next year, predicting it will now trough at $1.05. The bank recently lowered its outlook for US interest rates and Treasury bond yields, which implies a slower rate of appreciation in the dollar in the coming months. Deutsche Bank, another of the most aggressive euro bears in the investment banking community, has also raised its euro forecasts, although it still expects the euro to fall below parity with the dollar in 2017. "We delay some of our expectation for euro downside well into next year, given mixed messages from the European Central Bank," Goldman's currency strategy team led by Robin Brooks said in a note on Friday. "Overall, our view remains that the dollar will rise a further 13 per cent, but that appreciation is tilted against the yen near term and more back-loaded elsewhere," they said. Brooks and his team now see the euro falling as low as $1.05 next year compared with their previous forecast of $0.95. They still expect $0.90 will be reached over the next three years....13-05-2016