Economists at Goldman Sachs offer their outlook on the US dollar heading into this week's FOMC policy meeting.
Key quotes
"A convincing turn in the Dollar will likely require more calming inflation news and more balanced Fed policy. While some of the very recent news on inflation has been encouraging, we think a tactical Dollar selloff will require some acknowledgement of this by Fed officials this week.”
“While markets will again focus on the hiking increment at this meeting and guidance for September, the lesson from the June meeting is that it will be more important to focus on the Fed's criteria for adjusting its approach.”
"At the meeting this week, we will primarily be focused on whether officials broaden that criteria to put more focus on slowing activity data. Until that shift is clearer, it will be difficult for the market to price a more accommodative Fed and a weaker Dollar.”
