Neutral: GBP, CHF. To turn bullish on GBP from June 10 onwards est.
Short: NZD, CAD
Bearish for 3 mths: EUR, AUD (strong headwinds from Central Bank withdrawn guarantee and China's lending curb for 2010.
Feb. 8 (Bloomberg) -- For all the concern over the $1.6 trillion U.S. budget deficit and record debt load, the dollar is as valuable now as 35 years ago
A day earlier, strategists at New York-based Morgan Stanley boosted their dollar forecast, saying it will strengthen to $1.24 per euro by year-end from its previous estimate of $1.32. It traded at $1.3676 as of 6:46 a.m. in New York today. The firm sees the U.S. currency gaining to 109 yen from 89.42 today, and rallying to $1.49 to the pound from $1.5578 Rally by Default
Rather than a referendum on the U.S., the dollar may be rallying by default. Nouriel Roubini, the New York University professor who predicted the credit crisis, said on Feb. 4 that the greenback may weaken for the next three years
Feb. 1 (Bloomberg) -- Investors are pulling cash out of Europe at a record pace as central banks slow euro purchases, jeopardizing its status as a substitute to the dollar as the world’s reserve currency. Last year, policy makers load up on euros, while analysts at Barclays Plc in London and Aletti Gestielle SGR SpA in Milan
predicted central bankers would make good on threats to reduce the greenback’s dominance. Now the euro is down 8.4 percent since Nov. 25 in its fastest slide in 10 months amid concern that cash-strapped countries like Greece won’t pay their debts. Billionaire investor George Soros said Jan. 28 that there’s “no attractive alternative” to the dollar.
Feb. 2 (Bloomberg) -- The Bank of Japan’s expanded lending program to fight deflation won’t stall the yen’s gain, leaving the nation’s exporters less competitive in global markets, according to JPMorgan Chase & Co
Low prospects for fresh currency-market intervention and higher real-policy rates in Japan compared with previous years will support the declining trend of the dollar, Tanase said. JPMorgan Chase forecasts the yen to reach 85 yen by March 31.
Traders have spurned European stocks in favor of shares elsewhere for a record 19 straight weeks, “clearly hurting” the currency by draining a net $13 billion from the market, said Geoffrey Yu, a UBS AG analyst. Investors are as bearish on the euro as they were when the 2008 financial crisis was pushing them to the dollar’s perceived safety, futures data show. After buying more euros than ever in 2009’s second quarter, central banks pared back, International Monetary Fund data show.
“The euro can fall further,” said Neil Mackinnon, a former U.K. Treasury official who is a Londonbased economist at VTB Capital Plc, the investment-banking unit of Russia’s second- biggest lender. “Sovereign-debt risk will continue to be a key theme,” he said. “The stresses created by the fiscal situation in Greece won’t go away quickly.” Worst Since Inception Without specifying a timeframe, Mackinnon predicted the euro will weaken to $1.20. If it finishes 2010 at that level, the year’s 16.2 percent loss would be the worst since the currency’s 1999 inception.
