Published by Global Banking & Finance Review®
Posted on May 14, 2025
4 min readLast updated: January 23, 2026
Goldman Sachs notes investors are neutral on US dollar holdings amid trade developments. Tariffs impact M&A activities, but US-China truce boosts markets.
By Saeed Azhar and Megan Davies
NEW YORK (Reuters) -Goldman Sachs President John Waldron said a recent lightening up of U.S. dollar assets by investors had shown them returning to more neutral positions on the currency, rather than a wholesale "run for the gates."
Financial markets have witnessed a roller-coaster ride in the initial few months of the Trump administration as its April 2 move to increase tariffs on trading partners prompted some investors to move away from American assets. The White House has since made progress on tariff deals.
Waldron said that some investors "that were owning 10%, 20%, 30% more U.S. dollars in U.S. assets than they would otherwise be holding" had gone back to a more neutral position.
Waldron said investors had been optimistic about the U.S. outperforming the rest of the world. "Everybody, for the most part, had some expression of overweight U.S.," he said.
But after the tariff announcement, clients had been active repositioning portfolios in currencies, Waldron said.
"The lightening up (of dollar holdings) we've seen (since April 2) is more the excess coming out, not a wholesale run for the gates," Waldron told Reuters in an interview.
"Is there a sense that the volatility of U.S. policymaking is higher, and therefore we should be reducing our holdings? We haven't seen that yet."
Waldron, 55, was added to Goldman's board of directors earlier this year, a few weeks after he was given a retention bonus, cementing his position as a potential successor to CEO David Solomon.
TRUCE
The recent truce in the U.S.-China trade war has since set off a relief rally in stocks and propelled the dollar higher with the S&P 500 and the Nasdaq recovering losses since April 2 - or "Liberation Day" - when President Donald Trump announced sweeping reciprocal tariffs.
"The market is -- I'd call it relatively benign in the context of what was going on," Waldron said.
Waldron said that there was demand from investors for access to Chinese equities and fixed income products, and said that American firms were able to operate in China despite challenges.
"I wouldn't overstate the challenges between the two governments in terms of our ability to operate," said Waldron. "We can operate. The American firms are operating."
Waldron said most companies are trying to figure out how to navigate the impact of relatively higher tariffs from a cost standpoint.
"How much of this are we going to ... pass through on price? How much of this are we going to push back on our suppliers? Who's going to bear the brunt of these tariffs? And the answer is it will be shared," he said.
He said the tariff moves have also affected mergers and acquisitions, halting fresh dealmaking.
"If you were working on an M&A transaction, you were getting started on it or you were getting into it, you're probably pausing it," he said."If you were at the five-yard line and you were getting close to announcing it and it's not overly impacted by tariffs, you're probably going to go ahead and do it, and we've seen both."
Goldman Sachs is advising Hong Kong conglomerate CK Hutchison, sources previously told Reuters. The firm is selling most of the $22.8 billion ports business to U.S. firm BlackRock, including assets it holds along the Panama Canal.
The number of M&A contracts announced across the world - an indicator of global economic health - fell in April to the lowest level in more than 20 years, according to data compiled by Dealogic for Reuters.
(Reporting by Saeed Azhar and Megan Davies; Editing by Sandra Maler)
The article discusses Goldman Sachs' observations on investors returning to neutral positions on US dollar holdings amid trade developments.
Tariff announcements led to investors repositioning portfolios and impacted mergers and acquisitions activities.
The trade truce resulted in a relief rally in stocks and a stronger dollar, with markets recovering losses.
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