Goldman Sachs says the US dollar remains under substantial appreciation pressure
The latest note from Goldman Sachs on the US dollar:
"Following the more hawkish tone from the Fed at Jackson Hole, the Dollar has rallied around 1.5 percent versus the majors. While it remains an open question whether the Fed will follow through and hike at the upcoming FOMC, the recent strengthening highlights that the Dollar is a currency under substantial appreciation pressure, which asserts itself whenever the Fed steps off the brakes. For the FOMC, this is a genuine conundrum, because it means that too hawkish a message could send the Dollar sky-rocketing, a deflationary shock that would also weigh on growth, thereby – in a way – undermining the very rationale for shifting hawkish in the first place.