Goldman Sachs (NYSE:GS) said in a note it sent out this weekend that it is making bets against the U.S. dollar, under the theory that signs of economic recovery will induce investors to shift their funds away from the safety net of the dollar and back into the stock market. 

Thus far during the COVID-19 pandemic, many nervous U.S. investors have been sheltering their funds in cash accounts, lifting the deposit levels in U.S. banks. As the situation changes, they may begin to feel more sanguine about the prospects of equities again.

Investing in European currencies

While the authors of the note pointed out that Goldman Sachs' strategists don't see any immediate concerns for the dollar, there are positive signs in the European markets that make now an attractive time to make a move. The update noted the "steady reopening process, limited evidence of a pickup in Covid infection rates, and encouraging policy actions like progress on the EU Recovery Fund," referring to the 750 billion euro program the union created to boost the multinational zone's economy.

Dollars trading hands.

Image source: Getty Images.

Advantage: Norway

The bank singled out the Norwegian krone as a currency it expects to do well in the post-COVID-19 period. It set a target price of 8.75 kroner to the dollar and a stop at 10.25; it's currently at changing hands at 9.68.

Heads of Global Foreign Exchange Zach Pandl and Kamakshya Trivedi, who authored the note, cited Norway's advanced medical infrastructure, demographics, and well-developed economy as reasons why they expected the country to rebound quickly.

Norway currently has 8,440 reported cases of COVID-19 and has recorded 236 deaths from it. The country instituted strict guidelines to inhibit its spread and has a broad testing policy, and the government has sponsored a wide-ranging stimulus plan to keep businesses going through the pandemic.

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