KUALA LUMPUR: The US dollar will continue to serve its role as a safe-haven asset for as long as monetary policy uncertainties are prevalent across developed markets, according to Manulife Investment Management.
Head of asset allocation for Asia Luke Browne said the greenback has remained strong and has not been affected by emerging market or EM currencies.
“For a shorter term outlook, this is going to continue for the remaining of this year.
“This would make the US dollar attractive as an investment and that does not affect other investments or currencies, particularly in emerging markets,” he said at Manulife’s 2022 fourth quarter investment outlook virtual media briefing yesterday.
The greenback reached a two-decade high after the US central bank delivered a steep interest rate hike.
On Wednesday, the Federal Reserve delivered a third consecutive 75-basis-point hike this year, bringing the federal funds rate to a new range of 3% to 3.25%, in an aggressive move to fight inflation.
Meanwhile, Browne stated that inflation may prove sticky at elevated levels for longer periods with tight labour markets, supply chain disruptions, and energy and commodity-supply shortages remaining untamed.
However, he said some possibility of respite may emerge as stronger US dollar dynamics could be starting to work their way into import prices, excluding volatile food and energy prices. — Bernama
