All to play for as the dollar either rallies or divebombs

NEXT Thursday 23 September at 8am, analysts and commentators will convene for a forex jamboree at the Grange Hotel near St Paul’s. City A.M. editor Allister Heath will be talking forex with leading currency analyst Boris Schlossberg of GFT, and all readers are invited to attend – for free. Heath says: “This is a great opportunity for anyone interested in retail forex trading to hear from an expert in the field over breakfast.”

Among the topics under discussion will be the fate of the greenback in light of sluggish global growth. So what lies ahead for the world’s reserve currency of choice?

GREENBACK RALLY

In this scenario, housing and equity markets will stabilise without the need for further stimulus. Schlossberg summarises: “The best-case scenario for the dollar is that US growth picks up to 2.5 per cent by year-end, while the euro remains under the sovereign debt cloud.”

DOLLAR DIVEBOMBS

But things might not turn out so peachy. BNY Mellon’s Simon Derrick instead sees the buck plummeting 10 per cent in a worst-case scenario, as the Fed’s attempts at quantitative easing prove futile, merely devaluing the currency, and the US double dips.

In such a situation, the dollar’s fall might be tempered by a decline in risk appetite as traders flood away from risky bets. But if the US disappoints at the same time as growth in regions with rival reserve currencies (such as the yen or euro) picks up, the dollar could divebomb.

Readers interested in attending for more analysis should register for next week’s free seminar at www.gftuk.com/cityam.