Soros tips US dollar will fall further By Michael Mckee January 27, 2004 GEORGE Soros, who once made $US1 billion ($1.3 billion) betting on a drop in the British pound, said the US dollar may extend its decline in 2004 even as stocks rise.
When currencies drop they "tend to actually pick up speed" Mr Soros said at the World Economic Forum in Davos, Switzerland.
"Since the decline of the dollar in the short term is beneficial for the US economy, the authorities actually like it," he said.
The dollar has dropped 14 per cent against the 12-nation European common currency in the past 12 months and 9 per cent against the Japanese yen, buoying US exports while posing a threat to the economic recovery in Europe and Japan.
It has fallen 37.8 per cent against the Australian dollar since January 2003.
Even with the dollar's decline, the 73-year-old Soros expects investors to keep putting money into US stock markets.
The Standard & Poor's 500 Index, which rose 38 per cent last year, is up another 3 per cent so far in 2004.
The Nasdaq is up 6 per cent, after a 58 per cent gain last year.
A drop in the dollar makes US products cheaper to sell abroad, boosting American growth.
Exports climbed to a three-year high in November.
"Now, it's a very dangerous game because it can get out of hand," Mr Soros said.
"But at the moment, the Americans will not cooperate in any kind of intervention."
In 1992, Soros and Stanley Drucken miller, his chief strategist, earned about $US1 billion from the drop in the pound after the British government abandoned the sterling's peg to a basket of European currencies.
