Goldman: The US Dollar Could Fall By 15%

Goldman: The US Dollar Could Fall By 15%

over 3 years ago2 mins

Mentioned in story

A new report out from Goldman Sachs predicts the US dollar could be worth 15% less by the end of 2023, no matter what happens in the election 🇺🇸

What does this mean?

When the global economy’s having a particularly tough time. the value of the dollar tends to rise as investors buy into safe haven US government bonds. But now we’re starting to climb out of the depths of the coronavirus crisis, the dollar’s value is starting to drop again. And Goldman Sachs reckons it could have 15% further to fall – down to its lowest level since 2014.

The investment bank’s reasoning is this: it’s expecting the global economy to recover sharply from the pandemic-induced recession and US interest rates to stay low, both of which will hamper demand for US bonds and, in turn, the US dollar 💵 And while Goldman doesn’t know exactly when the dollar will collapse – the timeline could be affected by the pandemic and the election outcome – it’s sure a collapse is coming eventually.

Why should I care?

Goldman reckons the dollar’s drop in value could be accelerated if Democrats win both the White House and Congress in Tuesday’s election. But even if things stay as they are, it’s expecting the dollar to start tumbling from early next year 📆 Investors looking for a safe haven amid election turmoil, then, might want to turn away from the greenback altogether: Goldman’s recommending the Japanese yen instead.

As an investor, your wealth is directly affected by currency swings on a daily basis. You’re buying into another currency whenever you invest outside your home country, and even domestic companies you invest in are almost certainly buying from or selling to foreign firms 🌎 So it’s well worth watching the dollar – by most measures the most important currency in the world – very closely.

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