Investors continue to wonder if the dollar is coming to an end in the Forex market. And, although this is considered a minority view, relevant analysts from Goldman Sachs Inc. aim for the end of the dollar.
Goldman Sachs is one of the world’s largest investment and securities banking groups. He manages the most highly valued analysts and investors in the market for his experience and work.
Therefore, the opinions issued by its spokespersons tend to generate trends among investors and independent traders. Thus, this opinion emanating about the future of the dollar has caused quite a stir in the world of the stock and currency markets.
The inflection in the United States affects the dollar
Goldman Sachs stated as the basis for this weakness of the dollar the sudden growing concern about inflation in the United States.
Well, it issued a bold warning Tuesday that the dollar is in danger of losing its status as the world’s reserve currency.
In this way, Goldman Sachs analysts set off their alarms, considering that the United States Congress is approaching another round of fiscal stimulus, to shore up the economy devastated by the Coronavirus pandemic. Thus causing the Federal Reserve balance sheet to increase by about $ 2.8 trillion this year.
Goldman’s strategists warned that US policy is causing “fears of degradation”Of the coin.
They do not doubt that this could end the reign of the dollar as the dominant force in the Forex market. Furthermore, investors fear that this will trigger inflation for years to come.
Since the numbers that have been coming out of the dollar and piling furiously on gold. It makes investors better analyze the outlook for the US currency.
Gold as a reserve value for investors
The current environment of uncertainty in the world economy has inclined investors and large investment companies to safeguard their assets in securities that serve as reserves. And, for Goldman Sachs, gold does that, because they claim the dollar is coming to an end.
“Gold is the currency of last resort, particularly in an environment like today where governments are downgrading their fiat currencies and pushing real interest rates to record lows.“Wrote Goldman’s strategists, including Jeffrey Currie.
The Goldman Sachs report makes clear that Wall Street’s initial reluctance to sound the inflation alarm when the pandemic started is fading.
And now, the minority of analysts who considered this is increasing, while the uncertainty grows around the American currency.
Furthermore, they view gold’s rise to record levels with positivity. And with bond investors’ inflation expectations rising almost daily, albeit from very low levels, the debate over the long-term effects of the stimulus has grown stronger.
For Goldman Sachs, the growing level of debt in the United States, which now exceeds 80% of the nation’s gross domestic product, increases the risk that central banks and governments will allow inflation to accelerate.
However, the last word is with the United States Federal Reserve.
“Until we go through the FED, the dollar could strengthen as investors make a profitHe said in a note Edward Moya, Senior Market Analyst at Oanda Corp.
Dollar price to date
The dollar index was trading at the time of writing at $ 93,235, maintaining that downward pace in its figures.
Can the dollar recover?
The information in this content has been extracted from reliable sources detailed below:
1- Professional handling of content by the authors of CriptoTendencia.
2- External sources: Bloomberg.com