Goldman Sachs: Even a Fed rate cut may not ease the pressure on the exchange rate

Michael Cahill, a foreign exchange analyst at Goldman Sachs, said that despite the chatter of global policymakers, “we see that central banks are acknowledging that the Fed’s interest rate cuts will not necessarily bring relief, at least from the exchange rate.” Investors have also begun to embrace this new reality, ramping up their bets on the strength of the dollar in recent weeks. Data from the U.S. Commodity Futures Trading Commission as of March 26 shows that the positioning of non-commercial traders, including asset managers, hedge funds and other speculative participants, is currently the most bullish since 2022.