The Markets Will the dollar keep dropping?
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Jul 25, 2025 Kunal Shah, Co-CEO of Goldman Sachs International and a leader in Fixed Income, Currency, and Commodities, shares his expert views on the future of the US dollar. He discusses the impact of European fiscal investments on U.S. exceptionalism and the shifting dynamics in global markets. Shah also addresses the challenges facing China's economy and central bank policies, while highlighting potential currency trades like the euro-dollar. His insights offer a roadmap for navigating the financial landscape amid ongoing market volatility.
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US Market Rally Has Limits
- The recent US risk asset rally has strong fundamentals like earnings and deregulation.
- However, technical indicators suggest cautiousness as some froth and re-risking may be peaking.
Europe Growth vs. Challenges
- Europe has growth potential, especially Germany outpacing the US by mid-next year.
- Yet, broad European fiscal expansion and political challenges limit a unified bullish Europe trade.
Follow Fed Guidance Closely
- Watch the Fed’s upcoming statements and press conference closely for clues on September policy moves.
- Use this information to anticipate shifts in dollar trends and market positioning.