2010 foreign exchange rates 'good' for dollar

A high foreign exchange rate is expected for the US dollar in the following year according to an economist's predictions.

Reports from Stuart Thomson, an economist at Ignis Asset Management, suggested that the first half of 2010 will see strong growth for America, pushing the dollar up against the Australian dollar, the euro and the yen.

Mr Thomson said: "The dollar … shows outperformance during very strong and very weak growth.

"After further weakness in the first quarter, strong growth and higher interest rates will set in motion a prolonged dollar rally."

The economist added: "Sterling is the classic bridge currency between the euro and the dollar with the added frisson in 2010 of political uncertainty."

Mr Thomson shares the opinion of other economists that a hung parliament result in the British election would result in a "knee jerk decline in sterling".

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Posted by Thomas Smith