|
Chertkow, Once a Dollar Bull,
Sees Long-Term Decline
Agnes Lovasz
Bloomberg
Friday, April 4, 2008
The dollar will fall in coming years as the U.S.
seeks a weak currency to boost exports and cut its trade and current-account
deficits, said Paul Chertkow, the former head of currency strategy
at Bank of Tokyo-Mitsubishi UFJ Ltd.
The U.S. currency will drop to between 80 and 85 yen this quarter,
the lowest level since 1995, said Chertkow, who retired this week
after a 27-year career in global foreign exchange. It will also
fall to $1.65 against the euro and may trade as low as $1.70,
he said.
``The dollar will go weaker over time,'' said Chertkow, 60, who
correctly predicted the U.S. currency's appreciation in the 1980s,
a forecast he said earned him a reputation as a dollar bull. ``The
Americans like the weakness of the dollar because it improves
the competitive position of the U.S., which is one of the few
things going for the U.S. economy. The Americans also have to
recognize there has to be weakness in domestic demand.''
(Article continues below)
The dollar, which has lost 14 percent against the yen in the
past year, was at 102.27 against the Japanese currency by 8:47
a.m. in London, from 102.25 yesterday. It traded at $1.5707 per
euro, from $1.5684, for a decline of 17 percent in the past year.
The dollar fell to a record $1.5903 on March 17.
Chertkow is more pessimistic on the dollar than many of his peers.
The median forecast of 41 strategists and analysts surveyed by
Bloomberg is for the U.S. currency to hold at 102 yen and to rally
to $1.51 per euro by the end of June.
Yen `Opportunistic'
Investors should favor Asian currencies, Chertkow said, because
the euro has already almost doubled in value against the dollar
since trading at a record low 82.30 U.S. cents on Oct. 26, 2000.
Currencies such as the yen and Chinese yuan will be the biggest
beneficiaries as nations in the region reduce their trade surpluses
and the U.S. shrinks its deficits.
``The risk-reward is to look for currency pairs that haven't
moved nearly as much as the euro against the dollar,'' he said.
``That's why I think dollar-yen is so opportunistic. The dollar
will weaken further, mostly against Asian currencies.''
Full
article here.
|
INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
|
|
