The dollar looks fragile - but sterling's far worse

The old adage that you should never bet against the US consumer looks set to be proved wrong this year. But does it make sense to bet against the US dollar? Perhaps not - especially given that sterling looks worse.

The old investment adage - never bet against the US consumer is starting to look like it will finally be proved wrong this year. Retail giant Sears has warned that its fourth quarter earnings may fall by as much as 51% on last year, while credit card provider Capital One warned last week that its full-year results wouldn't meet expectations.

And it's not just the less well-off who are suffering. American Express had to write off around $440m last quarter due to rising bad debt provisions, and now expects to miss Wall Street forecasts for 2008. And that's depsite the 2007 claims from its chief executive Daniel Henry that it would be protected because of its "affluent and high-spending" clientele.

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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.