Where Do Currency Investors Go Now?
All the recent volatility in the markets has shaken things up in the currency sector. So--what should currency investors be doing right now? There were two somewhat different opinions on today's "Morning Call."
Nick Bennebroek is senior currency strategists with Brown Brothers Harriman--and as a defensive measure says the U.S. dollar looks good--right now. Ashraf Laidi is chief currency analyst with CMC Markets U.S.--and says he favors buying the euro instead of the U.S. dollar and British pound. Laidi says the story right now is not about the dollar. It's more about the yen carry trade ( the strategy where an investor sells a currency with a relatively low interest rate and uses the funds to purchase another currency at higher rates.) But he says that if the U.S. economy sees a slowdown--then it will be a dollar story--and not a good one.
Bennebroek says that while he sees the longterm prospects of the dollar to be "not so good," he does say that the dollar right now is a good defensive play. He cites previous periods of volatility where the dollar did well. But both men agree that a year from now--they would rather own the euro than the dollar.