Goldman sees jump in euro against dollar

Goldman Sachs has forecast the euro to rise against the dollar to $1.40 within the next twelve months. The median estimate of 66 analysts from a Bloomberg survey, by comparison, is a move to $1.24 by the middle of 2014.

Thomas Stolper, chief currency strategist at Goldman Sachs in London, said that while the dollar has benefited recently from the debate around a reduction of bond purchases, this will only be temporary.

This comes as the euro fell sharply to $1.3057 from $1.3072 yesterday on the back of weaker than expected economic sentiment in Germany.

EURUSD is currently at $1.3146. Federal Reserve chairman Ben Bernanke is due to speak this afternoon at 15:00 (BST).

Other forex predictions from Goldman:

Euro/ US dollar: 1.34, 1.37 and 1.40 in 3, 6, and 12 months.

US dollar/ Japanese yen: 105, 105 and 110 in 3, 6, and 12 months.

British pound/ US dollar: 1.47, 1.46, and 1.49 in 3, 6, and 12 months.

Australian dollar/ US dollar: 0.90, 0.88, and 0.85 in 3, 6, and 12 months.

New Zealand dollar/ US dollar: 0.77, 0.77, and 0.76 in 3, 6, and 12 months.

US dollar/ Canadian dollar: 1.05, 1.03, and 1.00 in 3, 6, and 12 months.

Euro/ Japanese yen: 140.7, 143.9 and 154.0 in 3, 6, and 12 months.

Euro/ British pound: 0.91, 0.94 and 0.94 in 3, 6, and 12 months.