Goldman Slashes EURUSD Forecast To 1.20
Now it is official 
If Draghis bosses are telling that in public now, then we can be sure that he will do his best to do what was told
are we really to believe Goldman Sucks
if i was to make a semi educated guess id say the Euro wont fall much past the 1.26/1.27 area
the French suddenly find a few billion down the back of the sofa and everything's fine in Euro land again
(although could be wrong, again)
watchout for Dollar resistance on the wkly in the next wk or two and reversal signals on the Dollar
because as we know the Dollar and Euro almost mirror there PA and the Dollar is nearing its 1st major resistance area on the wkly chart
how many must be ready to load up at 1.20
it sounds too good to be true
GS must be loving it and ready to clear out as many retailers as possible just in time for Christmas
(they are doing Gods work afterall)
With NATO barking of arming Ukraine (which is not even its member) I doubt that even 1.2 is the bottom for Euro
With NATO barking of arming Ukraine (which is not even its member) I doubt that even 1.2 is the bottom for Euro
yeah your right and the Euro does have form of falling to that area
whether a bit of slow growth for France and Germany? is really the main reasons as we are told is highly unlikely to be the real reason, or a war - we've had plenty of those in the last few yrs but no one seemed to really mind
the Euro and GBP were getting far too high and possibly a contributing factor for Germany's slightly slower growth, and not selling quite as many of their nicest cars, so something had to be done
inflation will rise though, but then again some seem to like inflation
just before the falls someone on CNBC nights said the FED would bring the Euro down on its next retrace back upto the 1.38 area
how he knew all this in advance i don't know?
ive forgot his name now, but would rather his expert view than the ones that sell bad products to their customers and then short the same bad products
as for the war - i did n't think the Ukraine was part of the Euro, but does look they will become part of Russia in the not to distant future unless someone does something, which is unlikely
who's next?
if i were the Americans i'd shoot down Putins plane.. and just say it was the separatists and one of there missiles went off target
Well at parts of this I must disagree, but, being Saturday evening I simply wish all a peaceful and nice weekend. I wish we were not forcefully politicized too, but that wish is a vane wish and it would be self delusion that I wish that to all too
Lets trade and see for how long we shall be able to do that now when super Mario officially anounced QE (and unlimited money supplies - read "print the money as crazy and transfer it directly to the pockets of already wealthy to make their behinds softer") in Europe too - and lets use the time we are elft to do we all think we are capable to do : make at least some extra income to our families
i'll agree with most of that
but hopefully the NSA will of scanned my post lol, and maybe will add it to their suggestion box for the black ops if they have some spare time on their hands
its a bit rough around some parts of the world though, so hard for it not to have some effect on all of us
the US are reported to have technology so advanced they could actually scare most to stop fighting just by releasing that it exists
same as when the Stealth was made public and is seen by some to of helped end the previous cold war
with abit of luck Hillary might sort it all out
Well Hillary is my "favorite" : the "poor" woman was able to collect from being deeply in debts (along with her equally smart husband) by simply blabbing nonsense for $250.000 per speech and opening pockets for everybody they were making any promise more than $2.5 billion. Just imagine what did she promise to her future to be bosses? If we think that it is bad now, we are wrong
All is political now
Even the Goldman Sachs forecast is political - they are counting on a larger war, not on economical data they are citing there
All is political now Even the Goldman Sachs forecast is political - they are counting on a larger war, not on economical data they are citing there
Not just now
For at least 40 years it is like that - from the moment when '68 was finished (defeated)
Well, this time if they do not succeed in setting the things right, I do not know who is going to vote for them
Anyway, low Euro is logical and necessary. EU zone can not export as much as it must to create and maintain jobs if the Euro remains strong (it is still too strong, according to a lot of analysis)
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
You agree to website policy and terms of use
Having flip-flopped from forecasting EUR strength for the next 12 months in April (target 1.40), Goldman has rapidly ratcheted down its expectations for the flailing currency to 1.30 previously and now forecasts EURUSD at 1.20 in 12 months. As Goldman notes, "because we believe the dynamics of the Euro have fundamentally changed and because we expect cyclical outperformance of the US, a prolonged period of Euro undervaluation can be expected and this is reflected in our longer-term forecasts." Trade accordingly...
Via Goldman Sachs,
1. We are revising down our EUR/$ forecast to 1.29, 1.25 and 1.20 in 3, 6 and 12 months (from 1.35, 1.34 and 1.30 previously). We are also revising our longer-term forecasts lower, bringing the end-2015 number down to 1.15 (from 1.27), that for end-2016 to 1.05 (from 1.23) and that for end-2017 to 1.00 (from 1.20). We switched from forecasting Euro strength to weakness in April, when we revised our 12-month forecast from 1.40 to 1.30, and the decline since then has been faster than we anticipated. Our latest forecast change aims to signal that the current move lower in EUR/$ has staying power and, in our view, is the beginning of a trend.
2. This forecast change is very much a restatement of our bullish Dollar view. Indeed, because we are keeping our EUR/CHF, EUR/GBP, EUR/NOK and EUR/SEK forecasts unchanged, this change is disproportionately important for our trade-weighted Dollar forecast. When we first switched to forecasting Euro weakness in April, this implied a 6% appreciation of the trade-weighted Dollar against the G10 on a 12-month horizon. Since then the Dollar has appreciated about 3%, i.e., about half that, thanks in large part to the drop in EUR/$. Revising our 12-month EUR/$ forecast to 1.20 implies a trade-weighted appreciation of the Dollar against its G10 peers of a further 6%. We think the USD still has room to catch up with the 2-year rate differential, which is currently the most Dollar-supportive since mid-2009 (Exhibit 1). In addition, changes to the Fed’s forward guidance in coming months have the potential to move the rate differential further in support of the Dollar (Exhibit 2), especially if US data continue their cyclical outperformance versus the rest of the G10.
3. We also believe that the dynamics of the Euro have fundamentally changed. Prior to the ECB’s latest round of easing in June, the foreign exchange market was very sceptical that additional monetary stimulus could be Euro-negative, since it would attract foreign inflows that would buoy the single currency. That thinking has changed fundamentally, in our view, not because foreign portfolio flows into the Euro area have abated (Exhibit 3), but because domestics are increasingly sending portfolio flows out of the Euro area, as ongoing ECB easing encourages a hunt for yield elsewhere (Exhibit 4). Our view is that these portfolio outflows have much greater potential to grow than foreign flows into the Euro area, given that periphery risk premia are already so compressed. Key pushbacks to our view are that: (i) speculative short Euro positioning is already very stretched, with the CFTC’s CoT report for example putting positioning now on a par with 2011/12, when concerns about a potential Euro area break-up were very real; and (ii) the view that the ECB is de facto on hold, as it implements easing measures announced in June. As we have argued in a recent FX Views, the large size of foreign portfolio inflows into the Euro area over the last two years likely means that the CoT report overstates speculative Euro shorts, which we see as moderate in the scheme of things. As far as ECB policy goes, we think there is – counter to market consensus – plenty of room for President Draghi to 'talk' the currency lower, which he notably started to do in the August press conference when he said that “fundamentals for a weaker exchange rate are today much better than they were two or three months ago”. Reinforcing his comment, we estimate that the fair value for EUR/$ is around 1.19. Therefore, even with the depreciation of the Euro in recent months, it is still expensive. Because we believe the dynamics of the Euro have fundamentally changed and because we expect cyclical outperformance of the US, a prolonged period of Euro undervaluation can be expected and this is reflected in our longer-term forecasts.
4. Our 12-month EUR/$ forecast of 1.20 implies a 5% weakening of the Euro on a trade-weighted basis versus the G10. With our 12-month forecast for EUR/GBP unchanged at 0.75, this amounts to a downgrade to our GBP/$ view, with the 12-month forecast now 1.60 (from 1.73 previously). As a result, we are now expecting somewhat less appreciation of Sterling, with the trade-weighted index rising well below 5% on a one-year horizon, down from 6% earlier this year.
source