Tags: Goldman | sachs | bullish | Euro

Goldman, Others Bullish on Euro, Predict Big Rise

By    |   Monday, 02 Aug 2010 01:11 PM

The euro has gained more than 9 percent against the dollar since hitting a four-year low of $1.1877 in June, and many experts say the move will continue.

That includes Goldman Sachs. It predicts the euro will rise to $1.35 within six months and $1.38 within a year, Bloomberg reports. The euro recently stood at $1.31.

Just about a month ago, Goldman had predicted the euro would keep slumping to a seven-year low against the dollar.

But economic data over the last few weeks showing weakness in the United States and strength in Europe have created a change in sentiment.

“Weaker U.S. growth, reasonably solid euro-zone macro data and less political-fiscal disruptions than feared have been a feature of the past few weeks,” Goldman analysts wrote in a report obtained by Bloomberg.

The euro’s drop was sparked by concerns about Europe’s debt crisis.

“People got a bit too excited about the idea the euro area was going to break up and forgot that the U.S. has a whole load of problems of its own,” David Bloom, global head of currency strategy at HSBC, told Bloomberg.

But some are more cautious, including TD Securities currency analyst Shaun Osborne. "Everyone seems to love the euro now,” he told Reuters.

“They've gone from thinking the euro zone was going to fall apart to assuming things are safe and sound. At best, (the gains) appear to be short-covering rather than people going outright long the euro."

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The euro has gained more than 9 percent against the dollar since hitting a four-year low of $1.1877 in June, and many experts say the move will continue. That includes Goldman Sachs. It predicts the euro will rise to $1.35 within six months and $1.38 within a year,...
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2010-11-02
Monday, 02 Aug 2010 01:11 PM
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