This is Exhings at Goldman Sachs where we discuss developments currently shaping markets, industries in industries, and the global economy.

I'm Jake Seward, global head of corporate communications

here at the firm.

And today, I'm joined by Zach Pandel,

co-head of the global foreign exchange interest rates and emerging markets strategy in

Goldman Sachs research.

Zach and his team have a new report out called Revenge of the two dollars and today

will bear his views on the strength of the US dollar compared

to some foreign currencies. Zach, welcome to the program. Thanks, Jake. So let's set the stage, talk about where the dollar was

compared to other foreign currencies as we came into the year 2020.

So the dollar started this year on very strong footing.

Really you've come from a five-year period in which US asset markets have substantially

outperformed the rest of the world. So the Federal Reserve went on a rate

hiking cycle, whereas the rest of the world kept rates at a negative place, and U.S. corporate earnings have

substantially outperformed as well, led by the mega cap tech stocks that dominate the U.S. markets.

On top of that, the dollar has always this sort of safe haven

appeal that has helped support the currency's valuation

through things like the trade war last year.

So all of these factors have driven a lot of portfolio flows from around the world

into U.S. markets over the last five years or so and raise the dollars valuation quite substantially.

So even so much so that there has been an on again

off again debate about whether the US government should take active steps to try to

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