Goldman Sachs has completely reversed its position on the US dollar, and it is expected that the dollar's weakness in the first quarter will not only continue, but throughout the year. As a result, the bank raised its EUR/USD exchange rate forecast sharply, indicating that the foreign exchange market is undergoing a structural transformation. Goldman Sachs's core view is that the weakening dollar becomes the benchmark scenario, and includes the “decline in the comparative advantage of the US economy,” which was previously a risk scenario, into the core forecast framework. Goldman Sachs believes that the “American exception theory” came to an end. Previously, the US dollar strongly depended on America's “extraordinary” economic performance and global capital inflows. As this narrative collapsed, valuation pressure began to reverse. This shift indicates that Goldman Sachs is joining the dollar bear camp, believing that weakening US economic fundamentals and the decline of “exceptionalism” will drive the dollar to continue to depreciate. The euro became the main beneficiary currency, and EUR/USD is expected to rise to the 1.20 mark by the end of the year.

Goldman Sachs has completely reversed its position on the US dollar, and it is expected that the dollar's weakness in the first quarter will not only continue, but throughout the year. As a result, the bank raised its EUR/USD exchange rate forecast sharply, indicating that the foreign exchange market is undergoing a structural transformation. Goldman Sachs's core view is that the weakening dollar becomes the benchmark scenario, and includes the “decline in the comparative advantage of the US economy,” which was previously a risk scenario, into the core forecast framework. Goldman Sachs believes that the “American exception theory” came to an end. Previously, the US dollar strongly depended on America's “extraordinary” economic performance and global capital inflows. As this narrative collapsed, valuation pressure began to reverse. This shift indicates that Goldman Sachs is joining the dollar bear camp, believing that weakening US economic fundamentals and the decline of “exceptionalism” will drive the dollar to continue to depreciate. The euro became the main beneficiary currency, and EUR/USD is expected to rise to the 1.20 mark by the end of the year.