Goldman Sachs: Decreasing dollar will not weaken demand for US assets
Anyone who expects the weakening US dollar to revive M&A activity may have to reconsider their views.
The US dollar has fallen in recent weeks to its lowest level since September 2018 due to zero interest rates of the Federal Reserve, significant monetary and tax stimulus programs and the U.S. struggle against Covid-19.
According to strategists, investors often believe that the weakening of the dollar will spur mergers and acquisitions because American companies look cheaper for potential foreign buyers. But their analysis of U.S.-European deals shows the opposite. The reason: a strong dollar usually reflects a steady growth of the U.S. economy against Europe, which, in turn, fuels interest from strategic buyers.