A better way to play the US dollar

It's too soon to write off the US dollar, says Merryn Somerset Webb. When stockmarkets fall, the dollar will bounce back. But if you want to bet on that, there's a better way to do it than buying greenbacks.

The dollar looks just about dead. The US is running a massive trade deficit, has an almost unfeasibly large budget deficit and offers basically no yield at all to anyone dumb enough to hold its currency. It is also still in recession and suffering from high and rising unemployment so the odds of interest rates rising to a level that might make the dollar attractive to international investors are pretty low.

But even worse than all that, rumours have surfaced (as they do every couple of years) that the Gulf states are planning to start pricing oil in a currency other than the US dollar. If that were to happen and one day it probably will it would deliver quite a blow to the dollar's status as the only real global currency, to say nothing of what it would do to demand for dollars.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.