Goldman Sees Dollar Strength as Energy Shock to Keep Rates High

The dollar strength will build further over the near term as the energy-price shock will keep yields elevated as economic growth remains relatively resilient, according to Goldman Sachs Group.

“The combination of rising inflation and relatively resilient growth has already meant higher-for-longer yields, and any further concern about the duration of the energy shock should continue to drive relative returns consistent with shifting terms of trade,” Karen Reichgott Fishman, a strategist at the bank, wrote Tuesday. “That scenario should also fuel broad dollar strength across Group of 10 currencies.”