Factors ranging from monetary-policy divergence to inflation trends indicate the dollar’s rally against its major peers during the past four months has scope to continue, according to Goldman Sachs Group Inc.
The U.S. Dollar Index posted its a 10th consecutive gain last week, the longest streak since 1967, and reached 85.485 today, the highest level since July 2010. It also still trades at almost its 10-year average, as measured by the Intercontinental Exchange Inc. gauge that tracks the greenback against the currencies of six U.S. trading partners.
“As big as the dollar move looks close up, it is actually small in historical and economic terms,” Robin Brooks, Goldman’s New York-based chief currency strategist, wrote in a note to clients today. In “reaction to client meetings in recent days, many have sticker shock at the recent strengthening in the dollar and are instinctively on the sidelines as they await/ hope for a pull-back,” he wrote.
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