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The foreign exchange market is not yet pricing in slower global economic growth and ultimately, the dollar will benefit from a global slowdown, Jim McCormick, head of currency research at Lehman Brothers in London, says in the FT’s View of the Day column on Tuesday.

The market’s main consideration, in McCormick’s view, has switched from whether or not to be in carry trades to macroeconomic themes, as heightened concerns about a US recession, combined with the sharp slowdown taking place in Japan and signs of slowing exports in Asia, make it clear the global economy is turning down.

“At the same time, the growing gap between easing swap spreads and rising corporate spreads suggests that while central banks have gained control of the extreme financial market stress, it has come too late to avert a significant slowing in growth,” says McCormick.

While commodity-sensitive currencies are linked to growth cycles, sterling has historically been the currency most positively correlated to global growth, he notes.

“Indeed, alongside the clear UK-specific reasons to be negative on the pound, the currency’s strong link to growth was an important factor in our call for further sterling weakness in 2008…On the flip side, while currencies like the Swiss franc normally benefit during global slowdowns, the US dollar has statistically been the most likely to rally”.

The dollar, he concludes, “will eventually benefit as the weakness in growth spreads to other parts of the world”.