Goldman Sachs Group Inc. (GS) says investors should buy the euro against the dollar, betting it will strengthen to a 14-month high of $1.37.
“We recommend long euro-dollar positions with a target of $1.37 and a stop at $1.29,” strategists including Thomas Stolper in London wrote today in a note to clients. A long position is a bet an asset will rise.
The euro appreciated 0.5 percent to $1.3357 at 9:20 a.m. New York time after rising to $1.3364, the strongest level since April 3. The currency last traded at $1.37 on Nov. 14, 2011.
The 17-nation euro has appreciated more than 8 percent against the dollar since July 26 when ECB President Mario Draghi said policy makers are ready to do “whatever it takes” to safeguard monetary union. The Frankfurt-based central bank unveiled an unlimited bond-purchase program in September.
The ECB’s pledge to backstop the currency union would “support the euro over time and correct some of the underperformance in recent years,” Goldman Sachs’ foreign- exchange strategists wrote in a separate report in November.
Europe’s shared currency jumped 1.6 percent against the dollar yesterday after policy makers refrained from cutting the region’s main refinancing rate from a record-low 0.75 percent and Draghi said the economy should gradually recover.
To contact the reporter on this story: Emma Charlton in London at email@example.com