Brace yourself for more from the dollar, says Mihir Worah, CIO for return and asset allocation at Pimco.
The dollar usually moves in three- to four-year cycles and appreciates by 20% to 25%, Worah said at the Morningstar investment conference Tuesday. If that’s true, there’s another 5% to 10% appreciation still to come, MarketWatch reports.
In March, the ICE dollar index, which measures the performance of the dollar against six other currencies, was up to 100. The index was down around 94 in April after mediocre U.S. data reports. The euro may be clawing its way back up against the dollar, but don’t hold your breath for the dollar’s demise, says Worah.
“The euro was at $1.05 [earlier this year], and there’s no reason we couldn’t go there again. Euro-dollar parity over the next two years is very much a possibility,” he said, while still noting that parity over the next three months is unlikely.
Photo: epSos.de via Flickr.