Asian Stocks Slide as AI Valuation Fears and BOJ Uncertainty Weigh on Markets 
New Zealand Budget Outlook Shows Prolonged Deficits Despite Economic Recovery Hopes 
Japan Exports to U.S. Rebound in November as Tariff Impact Eases, Boosting BOJ Rate Hike Expectations 
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Bank of Japan Poised for Historic Rate Hike as Inflation Pressures Persist 
Wall Street Futures Slip as Tech Stocks Struggle Ahead of Key US Economic Data 
Asian Fund Managers Turn More Optimistic on Growth but Curb Equity Return Expectations: BofA Survey 
Dollar Struggles as Markets Eye Key Central Bank Decisions and Global Rate Outlooks 
Oil Prices Rebound as U.S.-Venezuela Tensions Offset Oversupply Concerns 
Asian Stocks Slide as Central Bank Decisions and Key Data Keep Investors Cautious 
Singapore Growth Outlook Brightens for 2025 as Economists Flag AI and Geopolitical Risks 
Goldman Sachs warns that the U.S. dollar’s recent rebound may be short-lived, citing rising vulnerabilities and a likely shift in global asset allocation. The U.S. Dollar Index has gained 1.7% in July, recovering from a 12% drop in the first half of the year, primarily due to U.S. asset outperformance. However, Goldman strategists, led by Kamakshya Trivedi, argue this tactical bounce masks underlying fragility.
The bank believes global investors may soon resume diversifying away from U.S. assets amid policy uncertainty and unpredictable dollar-equity correlations. While markets initially viewed new tariffs as dollar-positive, Goldman highlights that prior tariff implementations have triggered dollar selloffs due to fading safe-haven demand.
Recent U.S. inflation data, they argue, shows modest tariff-driven price pressures but broader disinflation trends—supporting the case for Fed rate cuts, potentially deeper and earlier than markets expect.
In currency markets, Goldman sees the USD/JPY rally as stretched, with risks tilted toward yen strength around Japan’s upcoming elections. A strong showing by the ruling coalition may spark a reversal in USD/JPY, while a major loss could drive short-term upside. Nonetheless, the yen is expected to benefit from anticipated Fed easing later this year.
Goldman remains bearish on the British pound versus the euro, citing weaker valuation metrics and fiscal risks, despite short-term boosts from UK inflation and jobs data. They now expect the Bank of England to delay rate cuts until November, slightly postponing sterling weakness.
For the AUD/USD, Goldman expects the Reserve Bank of Australia to resume rate cuts in August. While near-term pressures remain, Fed easing could support the Aussie longer term. On the USD/TRY front, Turkey’s expected rate cuts and lower external risks reduce the lira’s carry trade appeal, with forecasts now at 42, 44, and 48 for 3-, 6-, and 12-month horizons.
