Currency investors who bet against the US dollar could face consequences, said Kunal Shah, Goldman Sachs Co-Chief Executive Officer (GSI). Shah highlighted that betting against the greenback is a bad idea, citing the broader markets’ phenomenal recovery since April. He indicated that a pullback is around the corner that could make long positions against the USD lose big.
His statements came when the DXY index fell to a three-year low, as TradingView reveals, with its price being stagnated around the 96 to 98 level. The currency is struggling to remain afloat above the 100 level as it is down nearly 9.5% year-to-date in the charts. The Goldman Sachs analyst said that while US exceptionalism is under question, the dollar’s prospects remain solid.
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Goldman Sachs Analyst Says the US Dollar is Down, But Don’t Bet Against It
Shah explained that the US markets recovered after the April crash and top companies reported exceptionally strong earnings. The development highlights confidence in the US markets despite all the odds stacked against it. “I think the last few months have very much told us all, do not try and bet against the US (dollar),” said the Goldman Sachs analyst.
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The US dollar is well grounded and could deter the undercurrent after the tariffs and trade wars settle down, said the Goldman Sachs head. “Earnings have been exceptionally strong. Look, the risk asset rally, particularly in the US it’s been fierce, and that recovery from April, when we had all of that chaos, has been strong. I think it’s been well grounded.”
“You’ve got the undercurrent of deregulation on its way. Obviously, the AI theme, and look, all of this has led to that clear debate again on US exceptionalism. And whilst there was that chaotic period, the range of outcomes narrowed and policy certainty on many key things returned. Right, which really helped that catch-up in the US,” the Goldman Sachs head summed it up.
