Pimco says that moving forward, the dollar is likely to fall in all but the most extreme cyclical scenarios
The investment firm says that the dollar is facing an "uphill battle" to find support as the Fed's accommodative monetary policy depresses yields:
"We believe an unprecedented degree of fiscal support, the Fed's expected commitment to make up for past inflation target overshoots, and the US' uneven recovery are likely to impart a depreciation bias to the dollar in all but the most extreme cyclical scenarios."
Adding that the speed in which a successful coronavirus vaccine will also have some bearing on how fast the dollar may sink from here onwards.
The firm also says that as the dollar wanes, the currencies that are likely to gain against the greenback are the euro (due to ECB's PEPP and recovery fund), aussie, loonie, Norwegian krona, Chinese yuan, and Korean won (improving risk appetite).
