In its latest update on the US dollar, following the greenback’s recovery post-Federal Open Market Committee (FOMC) meeting, Goldman Sachs reiterates its bearish bias for the US dollar.

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From its October 2013 low to the end of 2013 the trade-weighted Dollar appreciated 1.5%. Based on these guideposts, we would see roughly 1.5-3.0% additional near-term upside risk to the broad Dollar, assuming US activity data remains firm and markets continue to reprice Fed expectations in a hawkish direction.

However, despite the hawkish June FOMC meeting, we do not see a case for sustained Dollar appreciation. Most importantly, our own Fed expectations are more dovish than current market pricing: our economists forecast one rate hike by end-2023 compared to the roughly three currently priced in.

It’s worth noting that the US dollar index (DXY) consolidates the previous day’s pullback from early April tops while flashing 91.93 as a quote during Tuesday’s Asian session.

Also read: Dollar on the backfoot, DXY trades south of 92.00