I had a long chat last night with an asset manager who spends much of his time deliberating over what currencies he should be holding. His is a very macro view of the world and whilst he will adjust his portfolio based on extreme moves in the FX market, his core philosophies aren’t changing much.
He considers the USD and the EUR to be the two biggest risks in the currency market and he is avoiding both of these as much as possible. He sees the GBP as being so intertwined with the fortunes of the USD and EUR that it will struggle to avoid negative sentiment. He believes strongly in the Asian growth story and the continuing emergence of China so he’s happy to be heavily weighted into the AUD and other Asian currencies. The CHF and the JPY are a neutral play in his book and he will hold one or the other to varying degrees depending on the levels they are trading at.
It’s good sometimes to talk to really long-term traders as we can get often get really caught up in the day-to-day movements.
