Goldman Says Dollar Strength Will Fade If Iran War Hits Growth

The dollar’s rally since the start of the war in Iran could slow if currency and rates markets shift focus from the inflationary consequences of the conflict to growth concerns, according to foreign exchange strategists at Goldman Sachs.

“While the market has largely priced the oil shock as an inflation and terms-of-trade event, a shift towards larger downside growth risks would likely temper broad dollar appreciation” against G-10 currencies, Goldman’s Isabella Rosenberg wrote in a note on Tuesday.