The US dollar has been and will continue to be on a gentle weakening pattern, Jeffrey Gundlach, chief executive at DoubleLine Capital, said on an investor webcast late Tuesday. Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine, said the dollar "has not gone up in the past 18 months." Last month, Goldman Sachs abandoned the two strong dollar plays in its 2017 trading recommendations, pointing to the Trump administration's concerns over the strength of the currency, along with improvement in growth in rival economies.
In a note to clients, Goldman analysts said "a number of fundamentals have changed on the margin, such that the long-Dollar story no longer warrants a place among our 'Top Trades'." As for interest rates, Gundlach said he expected the yield on the 10-year Treasury to move higher. "I would prefer not to take a lot of interest rates risk now," said Gundlach, known on Wall Street as the 'Bond King' for his prescient and bold market calls.