In times of volatility there is a flight to quality — investing in what you know. When Lehman Bros filed for Chapter 11 bankruptcy protection in September 2008, the US dollar initially soared in value against a basket of currencies. However, as stability returned, volatility reduced and the dollar retreated. With the equity markets, at the time of writing, up 42 percent since their nadir at the beginning of March, many investors are now feeling that the worst is over and are looking to invest in currencies that are higher yielding than the US dollar.

When loan-to-value ratios (LTVs) were high, high debt levels provided a natural hedge against foreign exchange for externally denominated investors, as smaller amounts of equity were needed to fund transactions.

The current market is very different to that of a couple of years ago. With LTVs now limited to 60–65