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Goldman Sachs bets on U.S. dollar, could soar to $1.10 per euro, but Warren Buffet is bearish.

The strengthening U.S. economy, subdued inflation and rising stock prices are propelling thedollar rally into its fifth month as traders seek refuge from Europe’s fiscal crisis and Japanese deflation.

Goldman Sachs Group Inc. and Citigroup Inc. ended bets on a falling dollar last week after the trades lost 2.8 percent. Strategists are raising greenback forecasts at the fastest pace since last March, just before U.S. stimulus efforts that poured as much as $12.8 trillion into the economy ended the currency’s strongest rally in 28 years. Median predictions for the dollar against 47 currencies tracked in Bloomberg surveys rose an average of 1.4 percentage points in the month to March 24.

A year after correctly predicting the currency’s decline and likening it to the fall of Rome, Royal Bank of Scotland Group Plc’s Alain Ruskin said it may soar 22 percent to $1.10 per euro if Greece defaults.

“We’ve moved away from the worst fears,” said… READ MORE HERE

In spite of Goldman Sachs, the “oracle” Warren Buffet is bearish on the dollar,. He believes that the U.S. dollar will lose value in the long run. He views the United States’ expanding trade deficit as an alarming trend that will devalue the U.S. dollar and U.S. assets. As a result it is putting a larger portion of ownership of U.S. assets in the hands of foreigners. This induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make acquisitions of companies which derive a substantial portion of their revenues from outside the United States.