FXStreet (Delhi) – Research Team at Goldman Sachs, lists down few of the more significant potential risks to the US outlook, although 2016 will surely feature other surprises too. Key Quotes “Fed speed bump: The path in 2016 is still very uncertain and we see risks in both directions. A meaningful softening in the data, or a significant market selloff, could lead the Fed to an early pause in its tightening campaign. Conversely, if momentum in the US labor market remains strong and wage pressures pick up in the first half of 2016, Fed officials could conclude they are “behind the curve” and move at a faster pace than our once-a-quarter expectation. A faster pace of Fed tightening would contribute to more USD strength and might increase the probability of the “collapse to cash costs” scenario above. We would expect Southeast Asia (particularly Indonesia and Malaysia) and to a lesser extent India to be most sensitive to the pace of Fed tightening, outperforming in the “dovish Fed’ scenario and underperforming in a more hawkish scenario. China renminbi reset: Our base-case scenario is for the Chinese renminbi to depreciate modestly against the dollar over the coming year, to 6.60. Given our forecasts for USD strength against most major currencies, this would actually be consistent with a slight trade-weighted appreciation of the CNY. A stable or slightly appreciating TWI should be tolerable at least for the near term, given policymakers’ recent statements about the lack of a basis for yuan depreciation and the apparent preference for fiscal stimulus to support the economy. Still, with growth and inflation continuing to decelerate and fiscal policy struggling to gain traction, there is the risk that policymakers decide to engineer a more significant devaluation. This would spill over into broader currency depreciation across Asia, as we saw in late August and September of this year. Notably, the yen appreciated in that episode, presumably reflecting limits on countervailing easing by the BOJ, suggesting that such a China devaluation scenario could be especially problematic for Japan were it to occur.” For more information, read our latest forex news.