More and more investors are
getting bearish on the dollar as record oil prices slow the pace
of U.S. economic growth, a Bloomberg survey shows.
Fifty-four percent of the 70 traders, investors and
strategists polled on Sept. 30 and Oct. 1 from Tokyo to New York
said to sell the dollar versus the euro, up from 38 percent a
week earlier. The survey also predicted the dollar will weaken
against the yen, Bloomberg reports.
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The proportion of participants recommending selling the
dollar rose to the most in two months as crude oil closed above
$50 a barrel in New York for the first time. The International
Monetary Fund on Sept. 29 cut its forecast for U.S. economic
growth by 0.3 percentage points this year and next, to 4.3
percent and 3.5 percent because of higher energy costs.
“Rising oil prices are negative for the U.S. economy; it’s
hard to feel that the outlook for growth should be as positive”
as some reports have recently indicated, said Harriet Baldwin,
who is in charge of currencies in London at J.P. Morgan Fleming
Asset Management, which oversees $50 billion. “This has been
weakening the dollar.”
The dollar fell 1.1 percent last week to $1.2410 late Friday
in New York, according to EBS, an electronic foreign-exchange
trading system. The U.S. currency shed 0.2 percent to 110.45 yen,
the first drop in three weeks. The dollar, up 1.4 percent so far
this year, dropped 1.9 percent versus the euro in the third
quarter, Bloomberg reports.
Record prices for oil are a
“headwind” that threatens to sap U.S. and global growth, U.S. Treasury Secretary John Snow reported October 1.
Crude oil for November delivery rose 2.5 percent this week
to $50.12 a barrel on the New York Mercantile Exchange, the
highest closing price since trading of the futures began in 1983 and up 71 percent from a year ago.
Higher oil prices may prolong the “soft patch” the U.S.
economy entered in the second quarter, Robert McTeer, president
of the Federal Reserve Bank of Dallas, said in a Bloomberg interview on
Sept. 30.
Bloomberg News
