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Dollar Slump Persisting as Top Analysts See No Bottom
Bo Nielsen
Bloomberg
Monday, Nov 23rd, 2009
The most accurate dollar forecasters predict the
world’s reserve currency will continue sliding even when
the Federal Reserve begins to raise interest rates, which policy
makers say is an “extended period” away.
Standard Chartered Plc, Aletti Gestielle SGR, HSBC Holdings
Plc and Scotia Capital Inc. say the dollar will depreciate as
much as 7.1 percent versus the euro. About $12 trillion of fiscal
and monetary stimulus, the world’s lowest borrowing costs
and a record $4 trillion of government bond sales between 2009
and 2010 will weigh on the currency, they said. So will the
nation’s 10.2 percent unemployment rate and signs that
the economic recovery may falter, they said.
“History tells us the dollar shouldn’t start rising
on a sustained basis until 12 months after the Fed starts to
lift rates,” said Callum Henderson, the Singapore-based
global head of foreign-exchange strategy for Standard Chartered.
The best forecaster of the dollar against the euro in the six
quarters ended June 30 in Bloomberg’s ranking of 46 firms
last month predicts the greenback will weaken 5.4 percent to
$1.58 per euro in 2010, from $1.4944 today.
Full
article here
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