Flash: Unseen pressure on USD? – Goldman Sachs

FXstreet.com (Barcelona) - According to the Economics Research Team at Goldman Sachs, “A US investment recovery could potentially provide incremental upward pressure on the USD, tighten credit spreads for those that engage in capex spending and push revenues higher in areas that supply capital goods.”

Moreover, the industrial and tech sectors are among the clearest beneficiaries, along with indices with outsized exposure to these sectors, such as Taiwan, Korea, Japan and Germany. The policy goal is to stimulate private demand, particularly as fiscal policy in the US, Europe, the UK, China and elsewhere continues to be a headwind. Although aggregate measures of global activity seem to be slowing currently, our growth forecasts envisage a patch of acceleration later this year and into 2014.

For this to happen, policy easing needs to have a broader impact beyond, say, US housing, where the impact thus far has been clearest. Perhaps below the radar, our current forecasts do have this flavor, with improving investment spending a key element. We expect global investment to climb from 4.2% in 2013 to 6% in 2014. The US pick-up is most pronounced, reaching 10% in 2014.