Goldman Sachs strategists forecasted the U.S. dollar’s peak

On Friday, international investment bank Goldman Sachs stated that the U.S. dollar’s peak has to be expected for more than one financial quarter.

Analysis of historical cycles showed that the dollar most often reached its peak level when there was a significant slowdown in the global economy, or the U.S. economy in particular. Also, the dollar’s growth was observed at the time of the Fed’s monetary policy softening.

However, according to Goldman Sachs’ forecast, economic growth indicators won’t fall to critically low levels in the near future, and the current course of the Fed’s monetary policy isn’t expected to be changed till 2024. Regarding this, the dollar might peak relatively far from now.

As experts stated, the euro against the U.S. dollar will reach 0.94 next quarter, which is nearly 9% lower than the current level.

Thus, according to Goldman Sachs’ forecasts, the dollar’s peak is likely to be reached with the stabilization of global economic growth indicators and the resumption of free international capital flows. At the same time, experts don’t exclude the probability of the dollar’s significant increase sooner. For example, it might happen, if the Fed softens the U.S. monetary policy earlier, Europe fixes the situation with energy reserves, or China removes its restrictions against COVID-19 ahead of forecasts.