Goldman Sachs Expects Dollar to Weaken in 2027 as Support Factors Turn to Drags

According to Goldman Sachs strategists, reported on November 14, the U.S. dollar is expected to weaken in 2027 after strong but divergent performance in 2026. The bank identified three factors previously supporting the dollar—inflation, energy price resilience, and robust AI-related investment—that are expected to turn into headwinds. Near-term strength remains supported by solid economic activity, rising inflation risks, and ongoing political uncertainty, though strategists noted the currency plays only an ancillary role given limited divergence and elevated valuations. The report also flagged that AI-related demand, which has boosted the dollar this year, creates increased correlation with cyclical AI stocks, presenting additional risk.
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