LONDON (Reuters) - Morley Fund Management has recently moved overweight in the dollar in expectation that the currency will rebound in 2008, the firm’s senior economist John Ip said on Monday.
“Once we see economic activity pick up by, say, Q2 next year, there will be some dollar strength coming through,” Ip told Reuters. “We think the dollar is actually cheap now,” he said, particularly against the euro and pound sterling.
The euro was at $1.434 on Monday while the pound was fetching $2.012.
Ip said that as well as being cheap, the underlying conditions for a weak dollar were also changing.
“The (U.S.) current account deficit has found a floor. It has been improving for about two years now,” he said.
Morley is expecting economies to pick up next year after recent slowing. It is overweight equities and underweight bonds.
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