“Fidelity Investments, the Boston-based fund company that oversees $1.64 trillion, is bullish on the U.S. currency just as Pacific Investment Management Co. and Goldman Sachs Group Inc. are warning investors against buying.
“The value of the dollar is close to a bottom,” John Carlson, manager of the Fidelity New Markets Income Fund, wrote in a report yesterday on the company’s website. “I’ve never been more optimistic on the long-term prospects of the U.S. dollar and U.S. economy.”
America’s currency will strengthen over the next 18 months to three years because of competitive advantages in the U.S. including the rule of law, a strong education system and labor mobility, Carlson wrote. The greenback is cheap now, according to the report.
The dollar has dropped 13 percent in the past year against a trade-weighted basket of six currencies, even after rallying more than 3 percent from a 33-month low set May 4. Pimco and Goldman Sachs argue that overseas markets will lure money managers in the coming years with faster economic growth, higher interest rates and stronger government finances.
The U.S. currency slid 0.5 percent against the euro today to $1.4151 as of 12:50 p.m. in Tokyo.
Alternatives to Treasurys…”
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