Goldman Sachs has recommended short-positions against the U.S. dollar, arguing that the risks arising from vaccine trials and the U.S. election are skewed to the downside for the greenback.
, arguing that the risks arising from vaccine trials and the U.S. election are skewed to the downside for the greenback.
In a note to investors Friday, Goldman analysts said they saw "low odds" for the most dollar-positive outcome by the end of the year. They named this as an electoral victory for President Donald Trump, combined with a meaningful delay to vaccine progress.in most national polling and an advantage in the majority of key swing states.
Meanwhile, on the vaccine front, Pfizer is anticipating "conclusive readout" from the third phase of its coronavirus vaccine trial by the end of October, while Moderna has indicated that the first interim analysis of its phase three trials should be available in November. "If the vaccines are highly effective, these early results may be sufficient to imply a high probability of emergency FDA approval by year-end," Co-Head of Global FX, Rates and EM Strategy Zach Pandl said in the note.
"To be sure, there are important risks: we are most uncertain about the length of the vote count and the equity market reaction to a 'blue wave'. But the wide margin in current polls reduces the risk of a delayed election result, and the prospect for near-term vaccine breakthroughs may provide a backstop for risky assets."
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