Goldman Sachs: The Euro is only Headed Down

Amid Greece’s Sisyphean drama, the euro has been like a brick—you can throw it, just not very far. But that’s only temporary, Goldman Sachs says, sticking with its call for near-parity with the dollar.

“This week’s jump in the euro on news of the Greek referendum made no sense to us,” the bank’s analysts said in a note Tuesday. “We continue to see mounting tensions over Greece as a catalyst for the euro-dollar to go near parity, if contagion to other peripherals causes the European Central Bank (ECB) to accelerate quantitative easing.”  In one year’s time, the euro will be fetching just 95 cents, Goldman said.

Greece missed a repayment worth about 1.5 billion euros ($1.7 billion) that was due to the International Monetary Fund (IMF) Tuesday, making it the first advanced nation to ever default on a debt to the global financial stability agency. That followed months of contentious negotiations with its creditors over exchanging reforms for another bailout.