Credit Suisse - Global Equity Strategy Getting towards the end of the dollar sell-off*

Andrew Garthwaite / Research Analyst / 44 20 7883 6477 / andrew.garthwaite@credit-suisse.com

! Our FX team, headed by Ray Farris, believe like us that we have had the bulk of the dollar sell-off (indeed their 12-month forecast is 1.45 Euro/$
and 3- month forecast Euro/$ 1.43).
! We continue to believe that the Norwegian Krone should emerge as a very strong currency: it is the only major currency with a current account
and fiscal surplus (which are 11% and 10% of GDP respectively).
! On balance, the Asian currencies still appear to be very undervalued: the RmB on PPP is 45% cheap in absolute terms and NJA currencies
relative to their norm are close to all-time lows. After all NJA has a current account surplus of 3% of GDP and is net recipient of capital.
! Sterling: with the rebound in UK growth (as indicated by PMI) stronger than elsewhere (in itself a reflection of the monetary conditions in the UK
being looser than elsewhere), sterling could strengthen a little further against the Euro (it is currently 15% undervalued on PPP).