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The American dollar is unlikely to make significant moves higher in the near term due to the rising fiscal and current account deficits, Jeffrey Gundlach, the billionaire chief executive of DoubleLine Capital, said on a webcast presentation on Tuesday. 

Key quotes

The dollar looks terrible 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.

The amount of public debt outstanding has jumped by 15% in the first half of 2020 due to the unprecedented liquidity injected by the government and the Federal Reserve to help contain the economic fallout from the coronavirus outbreak. 

The dollar index, which tracks the value of the greenback against majors, is currently trading near 96.35, representing a 2% decline on a month-to-date basis. 

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