Economics
Goldman Asset Frets Dollar’s Surge May Deter Fed If It Goes On
- Trade-weighted dollar is at the strongest level since March
- U.S. financial conditions gauge has been negative since July
How Will U.S. Dollar Strength Impact Fed Decision?
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The dollar’s climb to a seven-month high has Goldman Sachs Asset Management concerned further appreciation could undermine the U.S. economy and deter the Federal Reserve from raising interest rates in December.
The Fed may hold fire if the trade-weighted measure of the greenback climbs to levels last seen in January, the asset manager said in a note to clients Oct. 28. The gauge is at its highest level since March 1. While Goldman said it still expects tightening in December, it has increased its bullish bets on the Mexican peso, Malaysian ringgit and Indian rupee that benefit from higher commodity prices and “decent global growth.”