Global currencies from the British pound and the Japanese

Yen to the Chinese Yuan are plunging at the same time the US dollar is

surging to new highs. So what's behind the volatility in the currency markets and how much higher can the dollar go?

Under our central scenario, we think even from current strong levels the dollar can appreciate further.

We have another couple of percent dollar appreciation baked into our forecasts for the next few months.

But in a more hockish scenario where US inflation is more entrenched,

the Fed needs to move further and keep rates higher

for longer than envisaged I think you could see another five to seven percent

appreciation on the broad dollar in that sort of hawkish scenario.

I'm Alta Nathan and with my colleague in Goldman Sachs research, Kamakia Trevetti, head of global foreign exchange,

interest rates, and emerging market strategy research.

Kamaxia, welcome back to the program.

Thanks, Allison. Pleasure to be here.

So it's been a pretty crazy time in the currency market, it's Kamakshia.

There's so much to talk about.

I can't wait for this conversation.

So let's start with what's happening in the UK where you're based. The pound took an absolute beating last

week on the back of the new government's tax plan and it even came within

spinning distance of parity with the US dollar,

although this weakness in the pound

has reversed somewhat on the Bank of England's

announcement to buy back UK sovereign bonds or gilts. So where does the pound go from here?

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