Multicurrency Commentary 3rd Quarter 2010
Strong 3rd quarter returns belie the considerable volatility that has swept currency markets throughout the year. The first half of the year witnessed a rally in the dollar and a decline in the value of most major currencies, as crisis in Europe (among other places) precipitated capital flows to U.S. Treasuries and the dollar. As crisis in Europe abated, and investors began to focus on the stable (if not healthy) outlook for the world economy, the safe haven appeal of the dollar faded. Investors began to weigh the strong growth outside of the U.S. more heavily in their calculus, and sold dollars for growth oriented currencies.