VIEW: Goldman Sachs note that their..........>

DOLLAR: VIEW: Goldman Sachs note that their "discussions with investors over the

last week again focused on the relationship between the USD & broad mkt risk

conditions. A renewed coronavirus outbreak in the U.S. is weighing on global

equity markets & other risky assets, and yet the USD continues to climb. FX

appreciation in response to domestic econ risks would be surprising for most

currencies, but it is a typical pattern for the USD. To understand why, we find

it helpful to think in terms of two Dollars: there is a "domestic Dollar" which

behaves like any other currency, but there is also an "international Dollar",

reflecting the fact that the USD denominates a large share of goods & assets

outside the U.S. In our view, the USD's global role creates an inverse

correlation between the currency & global growth or investor risk appetite, due

to the use of US Tsys as the world's primary "safe haven" asset, as well as

other factors, such as the expansion of cross-border lending in USD to EMs that

occurs in a strong global economy. Therefore, we would expect the USD to

strengthen further if virus concerns result in a larger risk drawdown, even if

those concerns are centered on the outbreak in the United States."