Wall Street does not have high hopes for the U.S. dollar heading into 2021.
According to the latest Commodity Futures Trading Commission (CFTC) data, net short non-commercial positions in futures tied to the U.S. Dollar Index (DXY) have climbed to a near decade high as the greenback has cratered seven percent in 2020.
Goldman Sachs Asset Management cited negative real yields, a booming stock market, and a current account deficit as reasons for the likelihood of further dollar depreciation next year.
The team wrote in a research note:
“We see depreciation in the dollar continuing into 2021. Liquidity dynamics and virus news flow may influence the timing of dollar weakness, but not necessarily the medium-term downtrend.”
At the time of this writing, the DXY is trading at around 90.00.
Leave a Comment