Gundlach doubles down on weak-dollar call after resilient 2019

Bloomberg

Billionaire money manager Jeffrey Gundlach said his strongest market conviction is that the still-resilient dollar will weaken.
The greenback has largely defied expectations for its demise, with the Bloomberg Dollar Spot Index ending last year less than 1% lower as foreign-exchange volatility dwindled. But the DoubleLine Capital chief executive officer said growing US government and trade deficits, a steepening yield curve and a pull-back in foreign investment may finally hit the currency.
“My highest conviction idea is that the dollar will weaken,” Gundlach said on his annual “Just Markets” webcast. “As foreigners start to divest from the United States, which I think is going to be a theme of the next few years — it may start this year — you’ll start to see a much weaker dollar.”
Gundlach, whose Los Angeles-based fund company oversees almost $150 billion in assets, has been warning of a potential dollar slide since at least early January 2018. Should that decline materialise, Gundlach expects it to benefit gold and other commodity prices.
The money manager said he doesn’t expect broad stock and bond market returns this year to “come anywhere close to 2019,” when virtually all major assets delivered once-a-decade performances.
However, investors can expect higher volatility in the decade ahead, according to Gundlach.