GO
Loading...

Halfway Through Dollar Rally; Stocks to Top in March: Charts

CNBC.com
Monday, 21 Dec 2009 | 6:51 AM ET

We are almost halfway through the dollar rally, Robin Griffiths from Cazenove Capital said Monday. Griffiths sees stock markets "topping" in March next year.

People have been trying to go for a rally in the dollar since October. Well, finally the trend has reversed and the U.S. currency has gained some and looks to gain more, Griffiths said.

His target for the dollar index is 81.

The rise in the dollar and subsequent falls in the euro, sterling and gold mean that "investors are taking risk off the table," Griffiths told CNBC.

"But the (overall) trend for the dollar is still negative," he added.

Almost Halfway Through Dollar Rally: Charts
We are almost halfway through the dollar rally, Robin Griffiths from Cazenove Capital said Monday. His target for the dollar index is 81. Griffiths also sees stock markets "topping" in March next year and suggests investors look at high yield sectors like oils, pharmas, telecoms and tobacco.

"Although equity markets are rangebound at the moment, they will, in fact, break out to the top of the range and go higher into early New Year," Griffiths predicted. "The rally won't last quite to May."

"We will rise now, gently, through the year end into the New Year and probably make a top in March," he said.

We have a "very steeply rising yield curve" on the 2-year Treasury Note, Griffiths noted.

"And one of the bets that would be right to put on between now and early in the New Year is a flattening yield curve," he said. "There's an incentive to move longer in the bond market to pick up yield."

"Yield is very important because you can get a lot better yield in some equities than you can get on Treasurys. And I think it is those equities who will be the ones that people will be interested in," he added.

Sectors where the yield is very high include oils, pharmaceuticals, telecommunications and tobacco, according to Griffiths.

Griffiths likes Deutsche Telekom in the telecom sector.

  Price   Change %Change
DTE
---

Featured

  • A customer carries Tesco-branded shopping bags as she leaves one of the company's stores.

    British supermarket giant Tesco reported a dip in group sales compared to last year, highlighting the challenges it faces in the U.K. and Europe.

  • Burberry's flagship store on Regent Street in London.

    British luxury retailer Burberry said strong sales in China and Korea helped it to a 19 percent rise in second-half revenue, beating analyst expectations, but said it expected currency headwinds to hit profits in the next two years.

  • Swiss bank Credit Suisse reported a 34 percent drop in first-quarter net profit from the same period last year, worse than analysts had expected.

  • People sing the Ukrainian national anthem during a pro-Ukraine rally in the eastern Ukrainian city of Lugansk.

    Ukrainian forces launched a "special operation" on Tuesday against separatist militia in the Russian-speaking East.

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video