Nov. 3 (Bloomberg) -- The U.S. dollar may appreciate 10 percent against the euro in one to three months, said Marc Faber, the publisher of the Gloom, Boom & Doom report.

“Maybe the dollar has made a turn, it can easily rebound by 10 percent,” Faber said in an interview in Istanbul. “It may have started already since the asset markets started to go down 10 days ago.”

The dollar advanced to the strongest level versus the euro in a month today on speculation Federal Reserve policy makers are discussing the outlook for record-low borrowing costs at its two-day meeting. The U.S. currency appreciated 0.5 percent to $1.4706 per euro at 3:18 p.m. in New York.

The U.S. currency has dropped 12 percent in the past year against a basket of six major currencies as the Fed, led by Chairman Ben S. Bernanke, cut rates to near zero in an effort to lift the U.S. economy out of its worst recession since the 1930s. New York University professor Nouriel Roubini said the dollar will eventually “bottom out” as the Fed raises borrowing costs and withdraws stimulus measures.

“I don’t think that the dollar will be a strong currency, but you can have periods like in 2008 that the liquidity tightens,” Faber said. “If you have the private sector withdrawing credit and the government throwing credit at the system you can get a lot of volatility.”

Faber said he would be careful to buy equities now as “we are in a correction period.”

The MSCI Emerging Markets Index declined for a third day and Russian stocks entered a correction, with the country’s benchmark Micex Index slumping more than 10 percent from its high in October.

“It could be a more serious correction then it’s perceived generally,” Faber said. “As of today, I will be long in dollars.”

To contact the reporter on this story: Seda Sezer in Istanbul at ssezer2@bloomberg.net

Last Updated: November 3, 2009 17:50 EST