The dollar will disappoint analysts expecting a broad rally in the currency versus major peers as a tapering of Federal Reserve stimulus isn’t improving the U.S.’s interest-rate advantage, according to Goldman Sachs Group Inc.
Goldman Sachs Group Inc.’s Thomas Stolper, who correctly predicted the dollar’s slide against the euro this year, is deviating from the consensus that the greenback will be among the best currencies to own in 2014.
Goldman Sachs Group Inc. recommended investors end a money-losing bet that the euro will gain against the dollar as new governments in Italy and Greece failed to calm investor concern that the region’s debt crisis will spread.
The yen slid to the weakest since June 2010 versus the dollar after Japanese Prime Minister Shinzo Abe’s government said it will spend 10.3 trillion yen ($116 billion) in new stimulus efforts that may weaken the currency.
For Raimund Muecke, the euro’s 17 percent surge against the dollar over the past five months signals a return to the days when a thriving Germany and an appreciating deutsche mark meant a robust Europe.
Slowing U.S. growth and the widening interest-rate gap between America and the rest of the world may mean no rebound this year for the dollar, the world’s worst- performing major currency in the past three months.
Japanese investors overseeing $47 billion say the Aussie’s strongest rally in five months is a false dawn, as a slowdown in China’s factories overshadows signs of strength in the South Pacific economy.