US dollar will keep losing its appeal as safe-haven currency of last resort, strategist says
A significant prediction has been made by Pacific Investment Management Company (PIMCO) for the US Dollar this year and when we look at this prediction we come to know that as on 31 December 2022 Pacific Investment Management Company has assets under management What that would have been was $1.74 trillion.
Indeed, a blog post was published last week by Gene Frieda, who is said to be an executive vice president and global strategist at Pacific Investment Management Company, and he said that he expects the USD to continue as a safe-haven currency of last resort. Will continue to lose its charm. Frieda said she believes the risk premium will definitely decline in the form of inflation and a lack of volatility in monetary policy, and new shocks are clearly a risk, but in her view, certainly in the USD. The risk premium (and cross-asset volatility) is present substantially. Furthermore the strategy works to explain that higher yields worked clearly in favor of the dollar last year and at the same time the dollar itself was in good shape, any view should note that the dollar is definitely hit in 2022 and to what extent it may decrease in 2023. He said that in 2022 definitely Russia and Ukraine war and increase in energy prices and many other factors were present as the cause of inflation and definitely we can say that this reason is going to increase its seriousness. describes the situation. The executive elaborated that Pacific Investment Management Co. firmly believes that the dollar, which lost value after hitting a 20-year peak last September, is likely to gain further in 2023 if inflation falls. If this happens, the risk of recession is reduced, and other shocks are less.
Frieda further adds that Pacific Investment Management Company believes that the gains of the dollar will actually reduce in the coming months compared to other developed economies by other means and we can also say that the faster pace of cumulative growth Given this, we strongly see the possibility of a fall in USD yield gains at the start of the rate cut cycle, even if this keeps the dollar higher.