Bill Gates, the world's wealthiest man, is betting against the dollar. The founder and chairman of Microsoft, worth $46.6bn (£25.7bn), has joined a growing number of influential economist and giants of the business world who believe the US currency is still overvalued.
 
"I'm short the dollar," Gates said in an interview with Charlie Rose, the television chatshow interview, at the World Economic Forum in Davos yesterday. "The ol' dollar, it's gonna go down."

Gates is concerned that widening US budget and trade deficits are undermining the dollar, a view which was also articulated at Davos by Jean-Claude Trichet, the president of the European Central Bank, Gerhard Schroeder, the German chancellor, and influential members of the business world.

The dollar fell 21 per cent against a basket of six major currencies from January 2002 to the end of last year. But over the past 12 months the US trade deficit has swollen to a record $609.3bn last year and total US government debt grew by 8.7 per cent to $7,620bn over the past 12 months.

Caio Koch-Weser, Germany's deputy finance minister, called on the US to produce a "credible" plan for reducing the US deficit.

Koch-Weser described the US budget fall as "the No.1 risk, disregarding geo-political risks" to the global economy.

George W Bush, the US president, has pledged to slash spending in his second term in a bid to halve the budget deficit, which rose to $427bn in the 12 months to September 2004. Bush will announce his fiscal plans for 2006 on February 7.

Gates' views echo those of Warren Buffett, the billionaire investor, who has been betting against the dollar since 2002.

"Unless we have a major change in trade policies, I don't see how the dollar can avoid going down," Buffet said ten days ago. Gates joined the board of Berkshire Hathaway last month.

Gates was more upbeat about the economic prospects of China, which he described as a "change agent" for the next two years.

"It's phenomenal," Gates said. "It's a brand new form of capitalism." Four months ago Gates' $27bn foundation received approval from China's foreign currency regulator to invest as much as $100m in the nation's yuan shares and bonds.

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