Asia to support global growth

According to the bank, US interest rates have peaked at 5.25%, signalling a slowdown in the economy. Maratheftis believes that rates will stay at this level for the first quarter and most of the second quarter of 2007.

Despite the US slowdown, Maratheftis is positive on global growth, with Asia, led by China, picking up the slack. "Asia holds the key to global growth as China continues to experience double-digit growth," he said.

Maratheftis said China has played a critical role in capping global consumer price inflation. He pointed to its silicon chip manufacturing industry as an example of how inflation has been kept low.

Strong growth expectations and low inflation means there are more opportunities in emerging-market currencies than in the majors, he added. A further reason for this is that the euro and sterling have historically shouldered the burden of big moves in the dollar, with the UK and European authorities offering the path of least resistance.

Maratheftis added that the sell-off in high-yielding currencies in May and June represented a correction in global markets. On May 1, for example, the Turkish lira was 17% overvalued. He said: "Now the currencies are fairly valued, it is easier to be positive about them."