Dollar Beginning to Appreciate 'A Bit,' Goldman Says

• Inflation forecasts are not de-escalating, and geopolitical re-escalation (e.g., two straits blocked) is occurring from a point of lower global energy inventories.
• The dollar's initial impact was muted, with a reluctance to fully commit to energy price increases in currency and inflation markets.
• However, with sustained increases in gas prices in Europe and oil prices, the dollar is now beginning to appreciate and acquire a 'front-footed nature'.
• Carry considerations are dominating returns, and the market is respecting the dollar's relatively high-yielder status, leading to global bond declines on fresh inflation concerns.

Kamakshya Trivedi of Goldman Sachs discusses the dollar's performance amidst re-escalating geopolitical tensions and persistent inflation concerns. He notes that while the dollar's initial reaction was muted, it is now beginning to appreciate due to rising energy prices and its status as a relatively high-yielder, with carry considerations dominating returns.