Goldman Sachs analysts Michael Cahill and Lexi Kanter said that credit conditions in the United States have not tightened as initially feared, and economic activity in Europe has not met the strong expectations earlier this year, so the dollar’s upside in the short term may Bigger than the market had expected, the overall depreciation of the dollar this year will be more limited than the market generally believes.
The U.S. dollar index has risen more than 1.7 percent so far in May as the market has adjusted expectations for the timing of the Fed’s rate cut, and the debt-ceiling standoff has also boosted the greenback’s safe-haven appeal.
Analysts say the dollar is likely to retreat only slowly from its highs, with some volatility in between.
With there not being enough factors to warrant continued appreciation of the euro and the policy paths of the Fed and the ECB not diverging so much, analysts see EUR/USD at 1.10 by the end of 2023.