AMP Capital Fund Manager Bets on 10% AUD/USD Surge

 
   By Vera Sprothen 
 

        SYDNEY-The Australian dollar is poised to surge by as much as 10% against the U.S. dollar, said a prominent fund manager at AMP Capital who on Tuesday significantly reduced his short positions on the currency.
        Nader Naeimi, who manages a 500 million Australian dollar (US$394 million) portfolio at the Sydney-based investment firm, said he had reversed his longstanding bet that the Australian dollar would fall further. Mr. Naeimi's calls frequently sway other funds within AMP Capital's portfolio.
        According to Mr. Naeimi, the Aussie will get a short-term lift as investors increasingly recognize the U.S. Federal Reserve is in no hurry to raise interest rates in June-and may not even do so at any time this year. Fears that commodity prices will tumble further are also overblown, Mr. Naeimi said in an interview.
        AMP Capital is one of Asia-Pacific's biggest investment firms with assets worth A$150 billion under management. Mr. Naeimi, who runs the firm's Dynamic Markets Fund, was among those who correctly called the bottom of the 2008 bear market in the aftermath of the global financial crisis.
        "For some time it seemed quite clear the Fed would raise rates, but that balance has tipped a bit," Mr. Naeimi said. "The Australian dollar now has room to move up 10% by the end of the second quarter."
        The Aussie had shed about 20% since the middle of last year to a low of US$0.7561 less than two weeks ago. It has risen in the past few days-while the greenback stopped rallying-after the Fed signaled that a rate increase, although likely this year, wasn't especially urgent. The Aussie was trading at US$0.7871 late Tuesday.
        "Should the U.S. dollar strengthen further, we probably won't see any tightening this year," Mr. Naeimi said, adding that the gap in investor expectations would likely force the U.S. currency down-in turn lifting the Aussie and worldwide demand for commodities, which are priced in U.S. dollars.
        Oil, copper and other commodity prices may also get a boost from rebounding economic growth in the U.S., Europe and Japan, offsetting a slowdown in China, he said. "Markets have pretty much written commodities off, but the negative sentiment has gone too far," Mr. Naeimi said.
        -- Write to Vera Sprothen at vera.sprothen@wsj.com
        (END) Dow Jones Newswires

        March 24, 2015 03:54 ET (07:54 GMT)

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