EURO and USD will be equal, says Goldman Sachs

13 Jan EURO and USD will be equal, says Goldman Sachs

The American economy has helped the US Dollar reach all time highs, and right now the US Dollar index is at an 11 year high. North of the border, the Canadian dollar is at record lows due to falling oil prices and not so impressive economic data. On the other side of the ocean the Euro is also getting slammed by gloomy growth in the Eurozone.

Now we have further breaking news. Goldman Sachs believes the U.S. dollar will catch up to the euro, and the two currencies will be about equal by the end of next year. That means currency exchange rates for USD/EURO will be 1-1 by the end of next year, according to Goldman Sachs.

3 Reasons that will cause the Euro to plunge:

• Europe’s rescue plan will weaken the Euro. Growth in the Eurozone has been virtually nonexistent and unemployment is stuck near record highs.
• It is expected that the European central Bank will launch a new stimulus program. This program is likely to boost the economy, it will cause an initial fall in the value of the Euro.
• Things in the Eurozone have gotten so bad that their consumer prices fell in December, marking the first bout of deflation since the Great Recession.

Although the U.S. economy is not perfect, it is moving at a healthy pace resulting in such high levels of exchange rates. It seems the USD has not yet topped.

Chart below displays the USD vs Euro vs CAD vs GBP from July 2014 to January 2015.

USD growth over Euro, GBP, and Canadian Dollar