BCA Research: sell the dollar, buy the Taiwan dollar and four other currencies
A major research firm is telling investors to get out of the US dollar, which is good news for Asian and European currencies and bad for anyone holding dollars.
- BCA Research says to sell dollars and buy the Japanese yen, Korean won, euro, Taiwan dollar, and Singapore dollar.
- The reason is simple: US interest rates after inflation are falling, and less foreign money is flowing into US markets.
- These five countries all sell more to the world than they buy, so money coming home should push their currencies up.
- The Chinese yuan should also rise, but Beijing is expected to step in and cap the gains.
- Brazil's real, the Indonesian rupiah, and the Philippine peso are seen lagging behind, so they are weak places to hide from the dollar.
Outlook: If pricey US tech stocks stumble, the foreign money propping up the dollar dries up and the slide accelerates.