The investment bank notified institutional clients on Tuesday that its proprietary trading desk is fully positioned, and the broader market is now cleared to begin driving the Chinese currency's price up.
Goldman Sachs Group Inc. notified investors on Tuesday that the Chinese yuan is currently 20% undervalued against the US dollar, signaling to clients that the investment bank has finished quietly amassing its own position and the global market is now permitted to begin driving the exchange rate higher.
The revised currency forecast, distributed in a morning note to institutional clients, projected a steady and aggressive strengthening of the yuan over the coming year. Strategists at the firm confirmed that after spending the past quarter absorbing massive volumes of the currency at a steep discount, they are finally comfortable sharing their sudden, unwavering conviction in China's underlying economic fundamentals.
We have thoroughly analyzed the macroeconomic indicators, and more importantly, our own trading book, and determined that the currency is exactly twenty percent cheaper than we need it to be.
Rival firms on Wall Street immediately responded to the note, with traders at JPMorgan Chase and Morgan Stanley scrambling to adjust their own portfolios to align with Goldman's newly published reality. The sudden consensus among major banks that the yuan is drastically underpriced has already begun moving global exchange rates, successfully generating the exact market conditions the investment bank required.
The bank's research division advised clients to act quickly on the upgrade, stressing that the window to purchase the currency will remain open only until Goldman reaches its internal profit targets. According to the research note, the 20% appreciation mark serves as a rigid ceiling for the currency's true value, as that is precisely the threshold at which the firm's automated trading systems are scheduled to begin dumping the yuan back onto late-arriving retail funds.