As the dollar rallied for a tenth consecutive session on Thursday, Goldman Sachs rather excitedly reversed its outlook for the currency.
“The dollar has bottomed!” analysts led by Thomas Stolper wrote. “Dollar lows are almost certainly behind us.”
Stolper’s 3-month, 6-month and 12-month euro forecasts are $1.45, $1.50 and $1.40; over the same timeframes, he expects the dollar to reach Y110, Y108 and Y114.
Goldman had previously forecast $1.56 vs the euro within the next three months, and had predicted Y106 for the same period....MORE
Back on April 24, two days after the dollar set it's then all time low versus the euro at $1.6018 we posted "Europeans, Buy Those U.S. Assets NOW" (see note below). On July 15 the euro marginally exceeded that mark, trading at $1.6038. Last I saw it was quoted at $1.4682.
This will set up the next decline in the stock market (a lesson I learned by paying full-boat tuition to Mr. Market):
Comment by - November 23, 2007 at 1:02 pm
Posted at the WSJ's MarketBeat blog
NOTE: From MarketBeat-
Real Men of Genius: InBev’s Currency Analysts
Joanna Slater has this report on a favorite MarketBeat topic — beer.
Does InBev owe the weak dollar a drink?
That’s what some analysts are suggesting following the news that the Belgian-Brazilian beer giant had launched a $46 billion bid for Anheuser-Busch Cos. If successful, the deal would be the third-largest foreign acquisition of a U.S. company, and the biggest all-cash deal ever.
Economists have long predicted that the dollar’s extended slide would translate into foreign appetite for U.S. assets, since they can be had at bargain prices in other currencies. Plus it means the cost of manufacturing in the U.S., relative to elsewhere, has fallen dramatically. Eventually, if foreign inflows multiplied, it would increase demand for dollars and contribute to a recovery for the beleaguered currency....MORE