Home » Banking » Goldman group joins Deutsche Bank to abandon $1 euro call

Goldman group joins Deutsche Bank to abandon $1 euro call

A one euro coin and a euro note is arranged for a photograph in London, U.K., on Tuesday, June 28, 2011. The euro dropped for the first time in seven days versus the greenback after Moody's Investors Service said banks rolling over Greek bonds into new securities may incur impairment charges. Photographer: Chris Ratcliffe/Bloomberg



Count Goldman Sachs Group Inc. among the growing list of banks abandoning their calls for the euro to reach parity with the dollar by the end of the year.
The New York-based bank joined Deutsche Bank AG this week in scrapping forecasts for the common currency to slump to $1 or below in 2016, citing changed outlooks for central-bank policy.
Goldman Sachs sees the euro trading at $1.05 in 12 months, up from 95 cents forecast previously, analysts led by Robin Brooks, the bank’s chief currency strategist, wrote in a note this week.
A day earlier, Deutsche Bank, the world’s second biggest currency trader according to Euromoney magazine, raised its year-end prediction to $1.05 from $1.
Strategists and investors are scrambling to revise their expectations for the euro after another round of easing from the European Central Bank failed to drive the common currency lower.
It has advanced 4.1 percent since December 31, confounding more than 80 percent of analysts surveyed at the time who expected weakness in the first half of the year.
Then, 14 banks saw the European currency slumping to parity or below with the dollar by the end of 2016. Now just five hold that view.
“We are doubtful that the ECB will be able to ease in an effective manner near term,” Brooks wrote in the note.
“It is not the fundamentals that have tripped up the dollar. Instead, it has been central-bank behaviour.” The euro bought $1.1309 in New York.
Both banks are sticking with forecasts for euro weakness over the long term.
Goldman Sachs expects the
currency to slide to 95 cents in 24 months — higher than the 90 cents previously forecast — and 90 cents in 36 months, Brooks wrote in the note.
Deutsche Bank sees the euro at 90 cents by the end of 2017, Alan Ruskin and George Saravelos wrote on May 12. That’s higher than an earlier forecast for the European currency at 85 cents.
The Goldman Sachs Group, Inc. is an American multinational investment banking firm that engages in global investment banking, investment management, securities and other financial services primarily with institutional clients.
The firm provides asset management, mergers and acquisitions advice, prime brokerage and underwriting services to its clients, which include corporations, governments and individuals. The firm also engages in market making and private equity deals, and is a primary dealer in the US Treasury security market.
While Deutsche Bank is a
German global banking and financial services company with its headquarters in Frankfurt. It has a large presence in Europe, the Americas, Asia-Pacific and the emerging markets.

Leave a Reply

Your email address will not be published. Required fields are marked *

Send this to a friend