Pacific Investment Management Company (PIMCO) believes the US dollar will carry on to lose its appeal as a secure haven currency of last resort. The $1.74 Trillion Asset Administration Agency was added to that of the greenback “is probably to falter even further in 2023 as inflation falls, recession risks ease and other shocks abate.”
PIMCO Analyst Predicts USD Decline
Pacific Investment Management Company The US dollar is anticipated to experience a sharp drop this year, according to PIMCO. PIMCO reported $1.74 trillion in assets below management as of December 31, 2022.
Gene FriedaPIMCO’s international strategist and government vp, Jeremy Sullivan, made the following statement in a blog post last week:
We You can count on the USD losing its security as a last resort and appeal.
“We believe that risk premiums will decrease as inflation and monetary policy volatility subside. Further shocks are clearly a risk, but the USD risk premium (and cross-asset volatility) remains substantial, in our view,” Added Frieda.
“While higher yields clearly worked in favor of the dollar last year, any forward-looking view must also take into account how the dollar was boosted by the shocks of 2022,” The strategist stated. “to what extent they may decline in 2023”. .” He It was found that many of the impacts were caused by the conflict between Russia And UkraineThe increase in energy prices and inflation.
The executive detailed:
PIMCO believes the US dollar has declined since it reached a 20 year high last September.As inflation subsides and other shocks abate, it is likely that it will fall even further in 2023.
PIMCO believes this. “the yield benefit of the dollar against other developed economies will narrow” In the next few months Frieda said. “Given the quicker pace of cumulative rate hikes on the way up, the USD’s yield advantage is likely to wane in the early stages of a rate-cutting cycle, even if the USD maintains its relatively high yield.” .
Do Do you agree that the US dollar is losing its appeal as a secure haven for last resort, according to the PIMCO analyst? Let Let us know via the feedback page.
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