Thomas Stolper, Chief Analyst at Goldman, downgraded the U.S. dollar versus the EURO to the following levels and time frames:

1.45        In 3 months

1.50        In 6 months

1.55        In 12 months

They also cut their three-month target for the USD/JPY to 82 YEN from 84 YEN and reduced its 12-month forecast to 86 YEN from 90 YEN.

The following are the key observations from Stolper's comments:

  • Large structural imbalances in the US are highlighted by weakness in the tradable goods sector
  • Unemployment still high, fiscal consolidation looming and continued weakness in the real estate sector, the growth outlook remains less compelling in the U.S. than in many other regions or countries
  • Interest rate differentials will remain negative for the dollar
  • Stolper's forecast for the 1st FED hike is not until 2013