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Goldman Calls Dollar Bottom Saying Traders Misprice Fed Resolve

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Cole: U.S. Dollar Not Strong or Weak, but Range Bound

Goldman Sachs Group Inc. says the dollar slump is over.

The greenback has rallied almost 1 percent from a one-year low reached last week, extending gains even after April payrolls data showed the weakest job growth in seven months. Goldman Sachs says the post-payrolls rally shows that market expectations for economic growth and Federal Reserve interest-rate increases have fallen too far, too fast, positioning the currency for a rebound. Strategists at Societe Generale SA and Brown Brothers Harriman & Co. are less bullish, saying a broader dollar recovery will depend on further economic data.

“We remain dollar bullish and think the trajectory is higher from here,” Robin Brooks, Goldman Sachs’s New York-based chief currency strategist, said in an interview with Bloomberg Radio. “The reaction on Friday to a meaningfully weaker-than-expected payrolls was telling: We had a disappointing jobs number and the dollar actually bounced.”

Goldman Sachs estimates that the dollar will advance 15 percent during the next two years as U.S. monetary policy normalizes, Brooks said in a report Tuesday. This isn’t the first...


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