Goldman Sachs on the euro and US dollar

Analysts at Goldman Sachs say selling EUR/USD is the best way to reflect bets on the US dollar.

They say rate differentials will continue to expand and note that even as US rates move higher, Eurozone rates are pinned down by the ECB.

"The front-end differential is now substantially wider than earlier in the year. The large reaction in EUR/USD also points to catch up in positioning, which is building and has further to go."

They expect EUR/USD to hit 1.05 before the ECB and parity by year end.

Another "reasonable" USD long would be in USD/JPY, they say. Elsewhere they see cable falling to 1.46 in 12 months and EUR/GBP at 0.6500.