Welcome to our exchanges at Goldman Sachs Markets Update for Friday, April 16th.

Each week we check them with a leader across the firm to get a quick take on what they're

watching in the markets. This week we're going

to discuss the latest trends affecting the US dollar and other currencies. I'm Jake

Stewart, Global Head of Corporate Communications here at the firm, and I'm delighted to be

joined today by

Zach Pandel who is co-head of Global Foreign Exchange Strategy for Goldman Sachs

research. Zach, welcome to the program.

Hi Jake. So Zach you've had a pretty negative view on the program. Hi Jake. So, Zach, you've had a pretty negative view

on the dollar basically because of its high valuation,

low interest rates in the US

and a recovering global economy.

But you recently published a note removing your dollar short trade can you explain why?

Yes we've had a negative structural view on the dollar but the dollar appreciated in the first quarter as the market really repriced its expectations for where the Federal Reserve is

headed over time. What we try to do with these trade recommendations is give investors the best

expression to try to extract value from the bearish dollar

thesis over time. We tried to short the dollar versus the

commodity currencies and G10 in the first quarter

like the Canadian dollar. Those were basically flat versus the greenback and so we decided to take a

step back. Now US rates have begun to stabilize recently despite very strong data. Five-year

Treasury yields are actually a bit lower now than

where they were one month ago despite booming growth and upside surprises to

...