Not What to Think
A reader forwarded this to me today:
Over the next 1 to 3 years the macro fundamental forces driving global currency markets are unlikely to alter significantly. We really are in a 10-15 year period, that started 7 years ago, of a shift in global investment perceptions away from being U.S. centric to being more balanced globally. At the same time, and to some extent related to global portfolio reweightings, sustained and strong economic growth is becoming more widespread. China and India are the much quoted examples, but the phenomenon is more general. As these once disparate and U.S. centric for exports economies continue to grow, they are doing more and more trade with each other. Gradually the rest of the world is moving away from its dependence on the U.S. This process has several decades to go, but markets tend to pre-empt, hence the U.S. dollar is already well on its way lower. In this environment any high yielding currency is going to do well, especially if it is the major financial center. Therefore a 2-3 year forecast for Sterling to be touching 2.2000 is not unreasonable.
Not trying to be a downer or crank. But I do find it instructive for those folks unfamiliar with trading to read ‘not what to think’.
