Dollar’s Downward Spiral?
Billionaire investor Jeffrey Gundlach, known as the “Bond King,” is predicting a significant drop in the value of the US dollar. He believes the dollar is on the verge of a major decline, potentially a 25% crash. Gundlach is closely watching the US Dollar Index (DXY), which measures the dollar’s value against other currencies. He sees a long-term downward trend and warns that a break below a key support line could trigger a bear market.
A Key Support Line
Gundlach has identified a diagonal trendline on the DXY chart dating back to 2011. If the DXY falls below this line, he expects a substantial drop, potentially pushing the index down to around 72 – a level not seen since 2011. Currently, the DXY is hovering just above this crucial point. A break below 97 could trigger this predicted 25% crash.
Worries Beyond the Dollar
Gundlach’s concerns extend beyond the dollar’s weakness. He’s also voiced unease about unusual behavior in the stock market, Treasury market, and the overall financial landscape. He suggests that foreign investors, holding massive amounts of US assets, might start pulling out due to worries about the US government’s spending. This could further pressure the dollar.
Disclaimer: This information is for general knowledge and does not constitute financial advice. Always conduct your own research before making any investment decisions.
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