Cover of MoneyWeek magazine issue no 712

The rising dollar

8 October 2014 / Issue 712

As the Fed prepares to stop its QE programme, the dollar is spiking upwards. John Stepek looks at how you can profit. Read this week's cover story here.

PLUS:
• Fracking could transform our poorest areas
• How to make millions playing computer games
• Why 2015 could be the year to buy Argentina

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Excerpt

Merryn Somerset WebbEDITOR'S LETTER

Merryn Somerset Webb

Steer clear of US assets

A private-equity friend emails to tell me that he has just bought gold for the first time since 2006. I ask him why? Is there anything in particular on his mind? His answer isn’t specific. “I just think that things look pretty rubbish everywhere,” he says.

You can see his point. Flick through this week’s magazine and, Matthew Lynn’s ode to fracking aside, you won’t find much joy.

We tell you about how the eurozone is heading for a triple-dip recession and worry that the falling oil price will cause a nasty fiscal squeeze in unstable states. We look at the miserable state of Nauru, the island where the cash has finally run out.

We note the ways in which even the greatest of fund managers trip up (Warren Buffett has lost a small fortune on Tesco and Bill Gross hasn’t had a good year). We look at the Ebola crisis: the misery of the illness and death it brings is obvious, but far beyond its physical reach (so far) it is already hitting markets and global travel.

And we also look at something that is causing a headache for a lot of investors – the US dollar. Last year, James Ferguson told us that the end of quantitative easing (QE) in the US, along with the beginning of QE in Europe, would lead to a much stronger US dollar.

He was right. The dollar index is now at a five-year high. That’s good news for Americans wanting to spend a weekend in Paris (and the workers driving the low unemployment numbers that are forcing the end of QE), but it’s bad news for pretty much everyone else.

• Read the full editor’s letter here: Steer clear of US assets