Goldman Sachs Advises Closing Long Euro-Dollar Bets

Investors should close bets the euro will gain against the dollar, according to Goldman Sachs Group Inc., recommending an end to the trade before the 16-nation currency reached the bank's target of $1.45.

The euro was in a 4 percent range between $1.3749 and $1.4304 since the U.S. investment bank's June 9 recommendation to purchase the currency. Investors would have made a 1.4 percent gain using $1.3890 as an entry, Goldman Sachs analysts wrote in a note to clients today.

"We do not see any near-term macro catalyst for an extension of the move in the direction we hoped for," the report said. "Going forward, we will be watching the market closely for a cleaner entry point to recommend fresh euro-dollar longs." A long position is a bet a currency will strengthen.

The dollar advanced today from near the lowest level this year against the currencies of six major U.S. trading partners, including the euro. The euro, which makes up 58 percent of ICE's trade-weighted Dollar Index, fell 1 percent to $1.4027.

The Dollar Index increased 0.9 percent to 79.531 after reaching 78.315 yesterday, the lowest level since Dec. 18. The gauge also tracks the greenback's value against the pound, yen, Swedish krona, Canadian dollar and Swiss franc.

To contact the reporters on this story: Daniel Tilles in London at dtilles@bloomberg.net; Oliver Biggadike in New York at obiggadike@bloomberg.net