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16 Mar 2015
EUR/USD to fall to 0.95, 12-m view – Goldman Sachs
FXStreet (Barcelona) - The Goldman Sachs Team gives the forecast for EUR/USD, SXXP EPS and Stoxx 600.
Key Quotes
“Our FX Strategists have been bearish of the euro against the dollar and sterling. They have further revised down their forecasts expecting the euro to fall to 0.95 vs. the dollar over 12m.”
“Our new FX forecasts result in upgrades to our top-down EPS estimates. This year we raise our SXXP EPS growth forecast very slightly to 5% from 4%; ex commodities we upgrade to 13% from 11%. For 2016 we upgrade Stoxx 600 earnings growth to 15% from 8%.”
“We also upgrade our market forecasts, and now expect a total return of 15% on the SXXP and 19% on the SX5E over the next 12 months. In dollar terms however these rises are only 3% and 6% respectively. The stronger local currency performance reflects better earnings and a continued fall in the cost of equity.”
“We remain overweight of European equities, continuing to recommend $ investors hedge their euro exposure.”
Key Quotes
“Our FX Strategists have been bearish of the euro against the dollar and sterling. They have further revised down their forecasts expecting the euro to fall to 0.95 vs. the dollar over 12m.”
“Our new FX forecasts result in upgrades to our top-down EPS estimates. This year we raise our SXXP EPS growth forecast very slightly to 5% from 4%; ex commodities we upgrade to 13% from 11%. For 2016 we upgrade Stoxx 600 earnings growth to 15% from 8%.”
“We also upgrade our market forecasts, and now expect a total return of 15% on the SXXP and 19% on the SX5E over the next 12 months. In dollar terms however these rises are only 3% and 6% respectively. The stronger local currency performance reflects better earnings and a continued fall in the cost of equity.”
“We remain overweight of European equities, continuing to recommend $ investors hedge their euro exposure.”