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October 12, 2008 10:21:19 AM CDT

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Weak Dollar Scaring Off Foreign Funds

Posted Jul 17, 08 4:18 PM CDT in Business 

(Newser) – With the dollar declining and US economic outlook uncertain, some large sovereign wealth funds are looking to cut down on greenbacks, the Financial Times reports. One such Persian Gulf fund has cut its dollar-denominated investments from 80% to 60%, and China’s State Administration of Foreign Exchange is aggressively exploring European investments—a sign they don't trust US policy-makers to defend their currency.

The dollar still enjoys the full backing of the single largest sovereign fund: the Abu Dhabi Investment Authority, but there is grumbling: "We are suffering. We are importing inflation for no reason," one staffer says.

Source Financial Times (UK)

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One Gulf sovereign wealth fund has cut dollar-denominated holdings by 20% in the past year, the Financial Times reports.   (AP Photo)
Sovereign wealth funds, skeptical that US policy-makers are acting to defend the currency, are cutting down on their dollar holdings, the Financial Times reports.   (AP Photo)
%u201CThe outlook for the US dollar is a significant issue for investors contemplating US-related investments,%u201D one analyst says.   (AP Photo)
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China  • inflation  • weak dollar  • investment  • Abu Dhabi  • sovereign wealth funds  • Abu Dhabi Investment Authority


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