What's going on?

A new report out from Goldman Sachs predicts the US dollar could be worth 15% less by the end of 2023, no matter what happens in the election.

What does this mean?

When the global economy is having a particularly tough time. the value of the dollar tends to rise as investors buy into safe haven US government bonds. But now we�re starting to climb out of the depths of the coronavirus crisis, the dollar�s value is starting to drop again. And Goldman Sachs reckons it could have 15% further to fall � down to its lowest level since 2014.


The investment bank�s reasoning is this: it�s expecting the global economy to recover sharply from the pandemic-induced recession and US interest rates to stay low, both of which will hamper demand for US bonds and, in turn, the US dollar. And while Goldman doesn�t know exactly when the dollar will collapse � the timeline could be affected by the pandemic and the election outcome � it’s sure a collapse is coming eventually.

Why should I care?

For markets: Danged if you do��

Goldman reckons the dollar�s drop in value could be accelerated if Democrats win both the White House and Congress in Tuesday�s election. But even if things stay as they are, it�s expecting the dollar to start tumbling from early next year. Investors looking for a real safe haven amid election turmoil, then, might want to turn away from the greenback altogether: Goldman’s recommending the Japanese yen instead.


For you personally: Currency affairs.

As an investor, your wealth is directly affected by currency swings on a daily basis. You�re buying into another currency whenever you invest outside your home country, and even domestic companies you invest in are almost certainly buying from or selling to foreign firms. So it�s well worth watching the dollar � by most measures the most important currency in the world � very closely.