Americans have a love-hate relationship with the dollar. We all want more money in our pockets, but when our currency gets too strong, it has a way of biting back and costing us even more than the benefits we reap from cheap imported goods.
While Morgan Stanley and other shops, have gone on the record labeling 2012 as "The Year of the Dollar," Brown Brother Harriman's chief global currency strategist, Marc Chandler is more nuanced.
"I don't know what that really means," Chandler says in the attached video. "But I do think that many international fund managers are underweight U.S. assets and equities because stocks have underperformed so much."
This despite Chandler's belief that foreigners will move more money into the U.S., while Americans keep more of their money here at home. Even so, his 12-month target for the Euro vs. Dollar is $1.30, which is where we are now.
Why so seemingly incongruous?
Because a lot of the move has already happened, with the Euro down about 13% against the Dollar from it's high in May, while the Dollar Index is nearing a 52-week high and up 10% in the 2nd half of 2011 alone.Read More »from 2012: Year of the Dollar or Default? Both Says Chandler