Small Business Philippines

‘Sun Worldwide’ on the cracks appearing in the US dollar’s paper armor.Sources close to “Sun Worldwide” suggest that the private fund is stepping up its advice to clients to exit US dollar holdings as the currency appears to losing its safe-haven status as investors rediscover their appetite for risk.

Individuals familiar with analysts at “Sun Worldwide” say that the firm believes that the recent rally in stocks and commodities, which has seen considerable sums of money exit the bond market, is highlighting the lack of fundamentals underpinning the dollar’s position as a safe-haven.

Gold, which has held its own as an “anti-dollar” play, continues to grind higher while yields on both the 10 and 30 year US Treasury Bond creep higher despite the Federal Reserve’s efforts to keep interest rates artificially low via quantitative easing.

“Sun Worldwide” believes that investors aren’t as likely to return to the bond market which will leave the Fed with no choice but to purchase the longer-dated treasuries with freshly-printed dollars.

Although the firm wouldn’t be drawn on dates, one of the unnamed sources suggested that as soon as investors felt confident enough to call a bottom in equities, the Fed would either have to raise interest rates to attract investors or, more likely, continue buying the bonds.

About the Author