$92,000,000,000 Asset Manager Says US Dollar Overvalued for ‘Many Years Now,’ Warns Trend Will Ultimately Be Down for American Currency

The deputy chief investment officer (CIO) at DoubleLine Capital, Jeffrey Sherman, recently shared his firm’s prediction that the US dollar will trade down in the short to medium term. In an interview with CNBC, Sherman pointed to capital flight as one of the main reasons behind this forecast.

Sherman highlighted that the dollar has been overvalued for many years when considering measures of purchasing power parity and a trade-weighted basket. He also mentioned that the Trump Administration and Treasury Secretary Scott Bessent prefer a weaker dollar this cycle as it helps absorb certain policies.

Moreover, Sherman mentioned that DoubleLine continues to recommend gold allocation for its clients, as gold has been showing strength across various currencies. Central banks globally have shown strong demand for gold, further supporting the notion of a weaker dollar.

In the past month, the U.S. Dollar Index (DXY) has lost nearly 0.5% of its value, almost 5% in the past three months, and close to 9% year to date.

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