Friday, January 22, 2010

2nd Largest Bond Fund Betting Dollar Will Go Lower, Not Buying US Treasuries

Kokusai Global investments is the world's 2nd largest bond holder at $45B. In a move not likely to help the US dollar, it has just announced that they will stop buying US Treasuries.

“The U.S., Europe, U.K. and Japan will all hold rates this year,”. “The U.S. will keep its policy rate, even though the market has priced in a rate hike. That will make the U.S. dollar go lower.”

This follows a similar annoucement by Bill Gross' a few weeks ago, who runs the biggest at Pacific Investment Management Co., and is buying debt in Germany and other developed markets outside the U.S.

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