Dollar Rally to Last for ‘a While,’ Jim Rogers Says

By Theresa Barraclough

Oct. 28 (Bloomberg) -- A rally in the dollar may last for “a while” as equity and commodities markets decline, said Jim Rogers, chairman of Singapore-based Rogers Holdings.

“Everybody is pessimistic on the dollar,” Rogers said in an interview with Bloomberg television in Singapore. “Whenever you have everybody on the same side of the boat, you know what you have to do. We may have a rally in the dollar, a decline in commodity prices or stock prices for a while.”

Rogers, an author whose books include “Investment Biker” and “Adventure Capitalist,” said in an Oct. 8 interview that there may be a rally in the dollar, although it won’t be “sustainable.” He said at a financial forum in Hong Kong in January that printing of the U.S. currency to help revive the economy would weaken the greenback and Treasuries.

The dollar has weakened so far this year versus all but one of its 16 major counterparts, including a 5.7 percent drop against the euro. The currency traded at $1.4812 per euro as of 1:55 p.m. in Tokyo from $1.4804 yesterday, after gaining 1.5 percent over the previous three days. The dollar weakened to 91.14 yen, from 91.80 yen.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, fell to 76.090 today, from 81.308 at the end of last year.

“The dollar is overdue for a rally,” Rogers said.

Trimming Net Longs

Investors have been reducing bets that the dollar will decline versus the yen and the euro. The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so- called net longs -- was 36,033 on Oct. 20, compared with net longs of 43,367 a week earlier. Similarly, net yen longs were 31,185 on Oct. 20, from 33,339 a week earlier.

Rogers, who predicted the start of the global commodities rally in 1999, said that raw material prices may decline for a while. The Reuters/Jefferies CRB Index, which tracks 19 commodities, has fallen 0.8 percent over the past week trimming this year’s gains. The index dropped 36 percent in 2008, its worst annual performance on record.

Rogers also said that he “certainly wouldn’t be buying U.S. Treasuries” and “couldn’t imagine lending money to the U.S. government for long periods of time.”

Ten-year Treasury yields have increase one and a quarter percentage point so far this year to 3.46 percent as President Barack Obama pushed U.S. marketable debt to $7.01 trillion, the most ever, as the budget deficit reached a record $1.42 trillion in the fiscal year that ended Sept. 30.

To contact the reporter on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net.