(NEW YORK) Gisele Bundchen wants to remain the world’s richest model and is insisting on payment in almost any currency but the US dollar.

Rich, and staying that way: MsBundchen (front row, centre) reportedly demanded payment in euros for contracts signed with Procter & Gamble and Dolce & Gabbana because of uncertainty over the dollar’s strength.

Like billionaire investors Warren Buffett and Bill Gross, the Brazilian supermodel, who Forbes magazine says earns more than anyone in her industry, is at the top of a growing list of rich people who have concluded that the currency can only depreciate because Americans led by President George W Bush are living beyond their means.

Even though the dollar has lost 34 per cent since 2001, the biggest investors and most accurate forecasters say that it will weaken further as home sales fall and the Federal Reserve cuts interest rates.

The dollar plummeted to its lowest ever last week against the euro, Canadian dollar and the Chinese yuan and the cheapest in 26 years against the British pound.

‘We’ve told all of our clients that if you only had one idea, one investment, it would be to buy an investment in a non-dollar currency,’ said Mr Gross, the chief investment officer of Pacific Investment Management Co and manager of the world’s biggest bond fund.

‘That should be on top of the list,’ said Mr Gross, whose firm is a unit of Munich-based insurer Allianz SE.

The dollar fell as much as 0.9 per cent last week to 1.4528, the weakest since the euro started trading in 1999. It lost 2.8 per cent against the Canadian dollar to 0.9347 and 1.8 percent versus the pound to 2.09. The Fed’s US Trade Weighted Major Currency Index measuring the dollar’s performance versus seven currencies, such as Japan’s, slid to a record low of 72.21.

BNP Paribas chief currency strategist Hans-Guenter Redeker, the most accurate foreign-exchange forecaster last quarter in a Bloomberg survey, said that the dollar may drop to 1.50 to the euro by year-end.

The median estimate of 42 strategists surveyed by Bloomberg is for the currency to end the year at 1.43. Among those surveyed last week, the forecast ranged from 1.42 to 1.50.

When Ms Bundchen, 27, signed a contract in August to represent Pantene hair products for Cincinnati-based Procter & Gamble Co, she demanded payment in euros, according to Veja, Brazil’s biggest weekly magazine.

She will also get euros for the deal she reached last October with Dolce & Gabbana SpA in Milan to promote the Italian designer’s new fragrance, ‘The One’, Veja reported.

Ms Bundchen earned US$33 million in the year through June, Forbes reported in July.

‘Contracts starting now are more attractive in euros because we don’t know what will happen to the dollar,’ Patricia Bundchen, the model’s twin sister and manager in Brazil, said in a telephone interview in September from Sao Paulo.

She declined to discuss details of the arrangements last week, as did Anne Nelson, Ms Bundchen’s agent in New York at IMG Models.

Procter & Gamble’s Sao Paulo-based external relations director for Brazil, Andre Quadra, said that he could not give details of the Pantene contract because of a confidentiality agreement.

Analysts in a Bloomberg survey however expect that the dollar will strengthen in coming months as stronger-than-forecast reports suggest that US consumers will keep the economy out of recession. Payrolls grew by 166,000 in October, double the median forecast of economists in a Bloomberg survey.

The dollar will rise to 1.43 per euro this year and 1.35 by the end of next year, according to the median estimate in the survey. — Bloomberg

Source: Business Times

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