DoubleLine's Gundlach bearish on U.S. dollar, says stocks 'lofty' By Reuters

DoubleLine's Gundlach bearish on U.S. dollar, says stocks 'lofty'

Economy Jun 09, 2020 09:40PM ET

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DoubleLine's Gundlach bearish on U.S. dollar, says stocks 'lofty'

By Kate Duguid

NEW YORK (Reuters) - The U.S. dollar is unlikely to make significant moves higher in the near term because of the ballooning budget deficit, Jeffrey Gundlach, the billionaire chief executive of DoubleLine Capital, said on a webcast presentation on Tuesday.

Gundlach noted the inverse correlation between the dollar and the twin deficit - the U.S. deficit plus the trade deficit - which has increased dramatically because of the government's stimulus efforts to combat the effects of the coronavirus shutdown.

"The dollar looks terrible," he said, and "the biggest reason is the way in which we're gunning the twin deficits."

"We know with metaphysical certitude that the twin deficit is going to go way higher, I'd say to at least 12% of GDP. That would suggest the dollar going all the way back to 2011 levels," Gundlach said.

As the Federal Reserve and Treasury Department have issued unprecedented levels of monetary and fiscal stimulus, the amount of public debt outstanding has increased 15% in the first half of 2020 year-over-year, according to Gundlach.

He believes the rising twin deficit will drive the dollar lower, despite the currency's appeal as a safe-haven investment and the likelihood that such assets will be in demand if U.S. stocks fall from their current levels.

"If you think that the stock market is going to fall from its fairly lofty perch right now - which I think is a pretty good bet, ... you would probably look for dollar strength in the near term. But the next big move in the dollar is still down, I think."

The U.S. dollar index (=USD), which measures the currency against a basket of six rivals, has fallen about 6.4% since hitting an annual high on March 19, prior to the announcement of the Fed and Treasury stimulus endeavors.

Euro drops against U.S. dollar amid renewed safe-haven demand By Reuters - Jun 30, 2022 2

By Joice Alves LONDON (Reuters) - The euro fell to a two-week low against the U.S. dollar and remained close to a 2015 low versus the Swiss franc amid safe-haven demand on renewed...

Further pain in store for Asian currencies after turbulent first-half By Reuters - Jun 30, 2022

By Harish Sridharan (Reuters) - Asian currencies will wallow in the near-term, analysts forecast this week, with any respite from their first-half losses only likely to come in...

Dollar Stabilizes; 20-Year Peak in Sight on Safe-Haven Demand By Investing.com - Jun 30, 2022 1

By Peter Nurse Investing.com - The U.S. dollar stabilized in early European trade Thursday, but still lies near its two-decade peak, given safe-haven demand on renewed worries...

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Comments (3)

Man Up Jun 10, 2020 2:44AM ET

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Dont fight the fed

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ruex champ Jun 09, 2020 10:57PM ET

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thats right bro

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Jeff Gordon Jun 09, 2020 10:32PM ET

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the market is fake, fed controls it. for the first time in history we all realize hiw fixed the game actually is.

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US 30	30,488.5	-540.8	-1.74%
US 500	3,751.3	-67.5	-1.77%
Dow Jones	30,506.09	-523.22	-1.69%
S&P 500	3,751.08	-67.75	-1.77%
Nasdaq	10,935.56	-242.33	-2.17%
S&P 500 VIX	29.61	+1.45	+5.15%
Dollar Index	104.993	+0.144	+0.14%

Crude Oil WTI	108.25	-1.53	-1.39%
Brent Oil	111.11	-1.34	-1.19%
Natural Gas	6.517	+0.019	+0.29%
Gold	1,819.30	+1.80	+0.10%
Silver	20.457	-0.281	-1.36%
Copper	3.7115	-0.0690	-1.83%
US Soybeans	1,560.50	-11.50	-0.73%

SPDR S&P 500	374.44	-5.90	-1.55%
iShares Russell 2000	167.22	-3.47	-2.03%
Invesco QQQ Trust	277.96	-5.84	-2.06%
Direxion Daily Junior Gold Miners Bull 2X Shares	34.96	-1.17	-3.24%
iShares Silver	18.92	-0.22	-1.15%
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ProShares UltraPro QQQ	23.34	-1.54	-6.21%

Apple	135.71	-3.52	-2.53%
Alphabet A	2,162.80	-71.23	-3.19%
Tesla	677.95	-7.52	-1.10%
Amazon.com	104.36	-4.56	-4.19%
Netflix	171.47	-6.89	-3.86%
Meta Platforms	161.22	-2.72	-1.66%
Bank of America	30.76	-1.10	-3.45%

DoubleLine's Gundlach bearish on U.S. dollar, says stocks 'lofty'

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