Global fund managers surveyed by Merrill Lynch this month expect the U.S. dollar to fall further and don't expect the Federal Reserve to boost interest rates until August 2004. According to the firm's October fund manager survey, 50% think exchange-rate volatility will rise and just less than half of the group still regard the dollar as overvalued, while 37% think the yen is undervalued. Also, 27% of managers expect more volatile earnings, up from 17% three months ago.
Separately, 65% of the 181 managers involved in global asset allocation that were polled are underweight bonds and 66% are overweight equities - the widest spread since the survey first asked the question in 1999.
A total of 307 fund managers, running a total of $981 billion, were polled from Oct.2-9.