London, March 14 (Bloomberg) -- Roy Adams, who oversees about $8.8billion at Old Mutual Asset Managers, comments on the outlook for majorcurrencies and interest rates:
On the British pound:
``I don't expect any surprises'' from U.K. reports this week, he said.``There's nothing there for the Bank of England to get excited about. U.K.growth will be slightly stronger and more even'' than U.S. expansion thisyear, he said. He sees the U.S. growing at a 2 percent annual rate. ``The U.S. will cut interest rates quite aggressively in the next month or so.The Federal Reserve will cut by 50 basis points'' this month, while ``theU.K. will cut 25 basis points at its next meeting.'' The ``rate differentialargument'' will help sterling gain, he said. ``Cable (sterling-dollar) will rise to$1.47 to $1.48 in the next month.''
On dollar-yen:
``We're very bearish on the yen. There is a very gloomy outlook. The(Japanese) economy needs reform. I can't see the light at the end of thetunnel this year. They need to appoint someone with a proper mandate whocan start reform.'' He sees the yen at 125 per dollar by the end of June.
On euro-dollar:
``The European economy will perform better than the U.S.'s this year. TheEuropean Central Bank will have to cut interest rates by 25 basis points inApril,'' then a further 25 basis points in the second quarter and the sameamount in the July-to- September period, he said. ``That should be good forthe euro, since economic growth will show up. We'll be at $1 per euro bythe end of the year.''