Interest rate cut expectations fluctuate, Goldman Sachs continues to be bullish on the US dollar
Goldman Sachs expects that Canada, the UK, and the Eurozone will all start cutting interest rates in June. If the Federal Reserve keeps interest rates unchanged, the US dollar may remain strong for a longer period of time
The uncertainty of the Fed rate cut expectations remains, while the global easing cycle seems to have begun, and the US dollar is expected to continue to be strong.
According to media reports, a team led by Goldman Sachs strategists Kamakshya Trivedi and Joseph Briggs stated in a report:
"If the Fed remains stable and other regions choose to continue easing policies, policy divergences may keep the dollar strong for a longer period."
The team also mentioned that if other central banks around the world start cutting rates "earlier and more aggressively" than the Fed, it would help the US achieve its inflation target.
The report predicts that Canada, the UK, and the Eurozone will all start cutting rates in June.
Since the beginning of the year, with the fluctuating expectations of a Fed rate cut, the US dollar has appreciated against currencies in the G10 group, with the dollar index rising by 3.25% cumulatively.
Last week, April CPI data showed a significant cooling, reigniting rate cut expectations. However, several Fed officials have been speaking intensively this week, with the overall tone leaning towards "not in a hurry to cut rates," stating the need to see more evidence of inflation decline.
Meanwhile, ECB President Lagarde mentioned that a rate cut may happen next month, as the rapid increase in prices has been largely contained