Bloomberg News

Currency Funds Advanced Most Since 2008 in April as Dollar Fell

June 06, 2011

June 6 (Bloomberg) -- Foreign-exchange funds gained the most in more than two years in April as signs of slowing U.S. economic growth sent the U.S. dollar tumbling, according to Parker Global Strategies LLC.

The Parker FX Index, which includes 66 programs managing more than $48 billion by 56 firms from Asia to Europe and the U.S., rose 2.04 percent, the Stamford, Connecticut-based company said today. The gain was the most since a 2.4 percent increase in October 2008, according to Parker Philp, a senior analyst at the company. The index fell 0.06 percent in March.

The Swiss franc and Australian dollar rallied to records against the greenback in April amid signs of accelerating inflation. The euro had a fifth monthly gain on speculation the European Central Bank would increase borrowing costs further while the Federal Reserve maintained record monetary stimulus.

“There were some extreme currency movements,” Philp said in a telephone interview from Stamford. “The managers were positioned well to profit from movements in the currency markets. The month was characterized by the weak dollar and all the other currencies rallying against it. Everything really rallied against the dollar.”

The Swiss franc strengthened 6.2 percent against the U.S. dollar in April, while the euro rallied 4.6 percent against the greenback, and the Colombian peso appreciated 5.9 percent.

Fifty programs of the 63 that reported results in April posted gains and 13 had losses, according to the statement. The index rose 1.8 percent in the last 12 months, it showed.

--Editors: Dave Liedtka, Greg Storey

To contact the reporter on this story: Cecile Vannucci in New York at cvannucci1@bloomberg.net.

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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