By Javier DavidReuters
May 20, 2003
Billionaire investor George Soros, once dubbed "The Man who broke the Bank of England," said in a television interview on Tuesday he was selling dollars in currency markets, briefly adding to the greenback's woes. His comments on CNBC, which came as the dollar was plumbing four-year lows against Europe's common currency and amid widespread doubts about the U.S. commitment to its so-called strong dollar policy, pushed the euro briefly above $1.17.
In the interview in which he assailed Bush administration policies, Soros said he was buying the euro and the currencies of Australia, Canada and New Zealand against the dollar, as well as gold.
Since last week, U.S. Treasury Secretary John Snow has made several remarks that suggested to traders that the United States has abandoned its long-standing strong dollar policy -- in the process touching off a broad rout in the dollar.
"I have to disclose that I now have a short position against the dollar because I listen to what the Secretary of the Treasury is telling me," Soros said in the interview.
Soros, the founder of Quantum Endowment Fund, one of the world's largest hedge funds, was dubbed "The Man who broke the Bank of England" for his role in betting heavily that the pound would fall in 1992. As a result, Britain suffered a humiliating exit from Europe's exchange rate mechanism -- the precursor to Europe's 12-nation currency. It was rumored that Soros earned $1 billion in a day with his bet against the British pound.
Though analysts say Soros' influence in markets has waned, many agree with the gist of his remarks and are reluctant to fight a trend that has pushed the dollar down sharply against major currencies. Soros was sharply critical of Snow's policy shift, branding it a "mistake" and labeling it a wrongheaded attempt to stimulate the U.S. economy at the expense of other economies.
"It's a beggar-thy-neighbor policy," he said. "I think (Snow) was somewhat irresponsible by talking down the dollar."
On Tuesday, the White House expressed its support for a strong dollar, the second time in as many days.
Market watchers say that it is very unusual for hedge funds to disclose how they are positioned. Soros, however, has often flouted convention -- particularly when policy issues are at stake. Soros was not immediately available for comment.
In afternoon trading, the euro rose above $1.17, a fraction of a cent from Monday's four-year high at $1.1738 -- a hair below the single currency's launch price. Gold, meanwhile, set a three-month high at $370 an ounce.
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