Further gains in USD contingent on meaningful fiscal stimulus – Goldman Sachs

The Dollar index has already rallied from 96.00 levels to 102.12; the highest level since 2003 on the back of heightened odds of a steeper Fed rate hike path in 2017.

Research team at Goldman Sachs believes the greenback could strengthen further if there is meaningful fiscal stimulus in the US economy, which is already close to full capacity.

Goldman sees Trade Weighted Index (TWI) USD to appreciate close to 7% against the majors over the next 12 months.