Source: Zero Hedge

Just as the year end onslaught on the dollar was spearheaded to a climax by Blankfein's minions, so did Europe finally decide to convulse under an unbearable lead of ridiculous mispriced "assets" and vomited up a whole load of troubling financial data, which spread from Greece to Austria to Ireland, setting sovereign CDS to multi month highs. Obviously, this did not help the weak dollar case and cost GS traders a few hundred million.

A note to traders indicates that while Goldman has not lost the war of intergalactic domination, it too, can lose the occasional battles:

Last Friday we were stopped out of two tactical trades, long EUR/$ for a potential loss of 1.8% and long GBP/$ for a potential loss of 1.1%.

Timing was clearly not optimal, and we were too early in fading the recent improvements in US data and the impact of Greek budget tensions. The technical break of important moving averages may have amplified the Dollar rally.

However, we continue to believe that the risks to both crosses remain skewed to the upside. In particular the balance of payment situation remains very Dollar negative. We also remain focused on very stretched speculative short EUR/$ and Cable positions and the related unwinding risks. We would therefore continue to look for opportunities to position tactically for Dollar weakness.

Fear not Goldman, there is only three months at most before Bernanke announces that he will be forced to buy all MBS from the end of QE 1 into perpetuity. In the meantime we suggest you do what you do best: short the dollar and bet on the imminent demise of America's middle class.