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Dollar is the currency to own, say analysts
11 Jan, 2011, 09.39AM
The world's most accurate foreign-exchange forecasters say the dollar will be the best currency to own this year as the Federal Reserve's bond purchases bolster the US economy instead of debasing America's legal tender.
Wells Fargo & Co , Bank of Tokyo-Mitsubishi UFJ and SJS Markets, the top analysts in the six quarters ended December 31, according to data compiled by Bloomberg News, say the dollar will strengthen against the euro, yen and pound. Nick Bennenbroek , the head strategist at Wells Fargo in New York and the most accurate of the group, predicts about a 5% gain against the euro over the year and 11% versus the yen.
The survey underscores the sudden turnaround in the US economy two months after the greenback fell to its weakest level in almost a year in November. Traders have turned their focus away from the Fed's plan to print cash to buy $600 billion of Treasuries and toward Europe's debt crisis, deflation in Japan and UK austerity programmes.
"The superior growth performance of the US should shine through in 2011," said Bennenbroek, 40, who joined the bank in 2007 and began his career in the forecasting department at the New Zealand Treasury in Wellington. "We will see the economic recovery in the US outpacing that of Europe, Japan and even the UK, which would see the dollar stronger against those currencies."
11 Jan, 2011, 09.39AM
The world's most accurate foreign-exchange forecasters say the dollar will be the best currency to own this year as the Federal Reserve's bond purchases bolster the US economy instead of debasing America's legal tender.
Wells Fargo & Co , Bank of Tokyo-Mitsubishi UFJ and SJS Markets, the top analysts in the six quarters ended December 31, according to data compiled by Bloomberg News, say the dollar will strengthen against the euro, yen and pound. Nick Bennenbroek , the head strategist at Wells Fargo in New York and the most accurate of the group, predicts about a 5% gain against the euro over the year and 11% versus the yen.
The survey underscores the sudden turnaround in the US economy two months after the greenback fell to its weakest level in almost a year in November. Traders have turned their focus away from the Fed's plan to print cash to buy $600 billion of Treasuries and toward Europe's debt crisis, deflation in Japan and UK austerity programmes.
"The superior growth performance of the US should shine through in 2011," said Bennenbroek, 40, who joined the bank in 2007 and began his career in the forecasting department at the New Zealand Treasury in Wellington. "We will see the economic recovery in the US outpacing that of Europe, Japan and even the UK, which would see the dollar stronger against those currencies."
