Goldman Euro Parity Call Shows Growth Crisis Draghi Confronts
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Goldman Sachs Group Inc.’s forecast for the euro to weaken to parity with the dollar comes as the region confronts escalating deflation and the risk that some of its biggest member states are falling back to recession.
Robin Brooks, the New York-based chief currency strategist, cut his six-month forecast today to $1.25 from $1.34, saying the European Central Bank will need to ease monetary policy further to counter falling inflation expectations. The 18-nation currency will weaken to parity by the end of 2017, he said. Goldman isn’t alone in cutting its outlook -- JPMorgan Chase & Co. also reduced its forecast today to $1.26 from $1.28 by the end of June 2015.