By David Wagner
According to a note published this weekend, the bank Goldman Sachs (NYSE:GS) is now recommending the sale of the US dollar, since the re-opening of the economies is expected to lessen the appeal of the greenback as a safe haven.
The analysts of Goldman said that although it is too early to predict “a decline in freehold and sustainable in the dollar given the balance of risks cyclical”, the short positions on the dollar now seem attractive on some currency pairs.
The bank has in particular put forward the “process of re-opening regular, the limited evidence of a resumption of the rates of infection by the Covid and political action, encouraging the progress of the stimulus Funds of the EU”, a borrowing program of € 750 billion to support the european economy in the face of the pandemic of sars coronavirus.
In more detail, they emphasised that the Norwegian crown was well placed to make progress during the remainder of the crisis of the sars coronavirus, and have recommended to sell short the pair USD/NOK with a target at 8.75 crowns to a dollar, with a stop if the crown’s 10.25. The crown currently stands at 9.68 for a dollar.
“Demography and medical infrastructure national of Norway make it better equipped than many other countries to cope with the epidemic, and its strong fiscal position gives it a definite advantage,” said Sunday the analysts of Goldman in the note.
“While others are forced to either limit their support to the fiscal policy, either to significantly increase their borrowings – both potentially adverse currency – Norway is able to repatriate funds from its foreign investments which will help to support the economy and the currency.”
