13.05.11

Despite losses this morning, the greenback remains well bid medium term

Despite the dollar giving up some gains against the majors this morning, currency markets are still looking for the greenback to make yet more gains this year. John Taylor, founder of the world’s largest currency-hedge fund, said the rally in higher-yielding assets is coming to an end with Europe’s sovereign debt crisis resurfacing, growth sluggish and banking systems unsteady. Higher-risk assets, such as equities, the euro and emerging market currencies, have either peaked or will do so by end of July, according to Taylor, who manages about $8.5 billion and uses statistical models to help predict future movements in assets. Global investors have tempered their optimism about the U.S. and world economies and plan to put more of their money in cash and less in commodities over the next six months, a Bloomberg survey released today found.