Euro to Appreciate to $1.55 in Three Months, Goldman Sachs Says

Goldman Sachs Group Inc. recommended its clients buy the euro versus the dollar, forecasting the common European currency will rise to $1.55 in three months amid an anemic U.S. economic recovery.

The dollar reached a two-month high of $1.4504 per euro yesterday on speculation U.S. growth is gathering momentum and as Greece struggled to address concern that it isn’t doing enough to reduce its debt.

“The recent positive growth impact from the inventory cycle and fiscal stimulus is likely to taper off during 2010,” analysts at Goldman Sachs wrote. “On the other side of the Atlantic, we would assume that a pretty negative scenario for the Greek budget is fully priced given how much sovereign spreads have widened in recent weeks.” (more)