Jim Rogers Shunning ‘Pretty Bad’ Sterling on Trade Deficit

By Simon Kennedy and Andrea Catherwood

March 19 (Bloomberg) -- Investor Jim Rogers, chairman of Singapore-based Rogers Holdings, said he is shunning sterling because of the U.K.’s trade deficit.

“Things are pretty bad for sterling for the long, long, long term,” Rogers said in an interview with Bloomberg Television today. “I cannot imagine buying sterling back unless it gets really cheap.”

Rogers is the latest investor to question the British pound after the currency’s worst annual start in 13 years. Wagers on the pound weakening against the dollar outnumber futures that profit on an increase by eight times. That’s more than when George Soros made $1 billion betting against the pound in 1992.

“I doubt I will own sterling in my lifetime,” said Rogers, 67, who co-founded the Quantum Fund with Soros.
Hedge funds and large speculators had 67,549 more bets the pound would decline against the dollar than contracts that profit from an increase as of March 2, data from the Commodity Futures Trading Commission in Washington show. The so-called net-short position has averaged 60,548 in the five weeks to March 9, compared with about 7,200 in October 1992, when Soros was profiting from the pound’s plunge.
The U.K. trade deficit unexpectedly rose in January to the widest in 17 months, reaching 8 billion pounds ($12 billion).

Greek Bailout 

Rogers repeated that Greece shouldn’t be bailed out and that allowing the country to go bankrupt would propel the euro “through the roof” as investors concluded it was a “hard currency.”

“Why should you support people who’ve been living high on the hog on someone else’s money?” said Rogers, who said he has a “massive amount of short positions” in the single currency.

Greek Prime Minister George Papandreou is campaigning to secure an explicit pledge of European aid and cut his country’s borrowing costs as 20 billion euros ($27 billion) of debt comes due in the next two months. The appeal is being stymied by a deepening split among the region’s leaders on whether the International Monetary Fund should assist the nation.

“I think they’ll probably paper this crisis over,” Rogers said. “If they do, the euro will look better for a little while.”


To contact the reporter on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net; wkennedy3@bloomberg.net; Andrea Catherwood in London at acatherwood@bloomberg.net
Last Updated: March 19, 2010 06:27 EDT