Goldman Sachs on what is driving the US dollar (spoiler - no surprises in this one)

Author: Eamonn Sheridan | Category: News

GS on the USD, more of a summary than anything new so I'll keep it brief. Interview with GS economist via Bloomberg 

  • dollar moves are being driven mainly by US-China trade war & and flight-to-quality in Treasuries
  • not so much by the outlook for the Fed
  • GS saw portfolio outflows from almost every country in August except the US
  • all of the inflow into the US was into fixed income
  • With an improved outlook for US/China today because better prospects for global growth tend to lift Treasury yields and weigh on the dollar
But:
  • USD softness will likely be relatively short lived
  • could be continued positive news in coming weeks but hurdels to a long lasting agreement are high … "we are on the path of de-escalation" 

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