Fed dot plot to determine near-term direction in the US dollar – Goldman Sachs
Analysts at Goldman Sachs offer their near-term outlook on the US dollar, citing that it depends on the Fed’s dot plot graph.
Key quotes
“The currency's near-term direction will likely be determined by the Fed: if the "dot plot" at this week's FOMC meeting shows a two-hike median for 2022 we may see the recent weakness extend while a baseline of three or more hikes for 2022 would likely result in a return to USD appreciation.”
“Beyond this month, incoming inflation data will likely set the course for the Dollar.”
“There is a wide range of possible outcomes. In our baseline outlook—which envisions three Fed rate hikes next year alongside solid global growth—we see a range-bound USD vs EUR and most other G1Os, but decent gains vs USD for a number of EM crosses.”
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
