While they’ve spent much of the past several month moving in opposite directions from each other, the dollar and the stock market now may well move upward together, according to top hedge fund manager Barton Biggs.
“After a severe economic shock like we just had, the odds are that we’re going to have a pretty good burst of growth in 2010, 2011,” Biggs told Bloomberg. “I don’t see any reason why we can’t have a further rally in the dollar and a further rally in stocks. My guess is that the next move in both could be on the order of 10 percent.”
Biggs says the dollar is undervalued compared to the yen and the euro, and says the idea that the dollar and stocks must move in opposite directions is “a bunch of baloney. … The market just sets investors up for these relationships, and then it reverses on them.”