Remarks from Mihir P. Worah, Chief Investment Officer Real Return and Asset Allocation

and Geraldine Sundstrom, portfolio manager.

This via Bloomberg:

  • Says USD will continue to appreciate at slow pace
  • Limits to how far it can rise
  • "If the USD gets too strong, it is likely to lead to tighter financial conditions, causing large U.S. corporations highly exposed to overseas demand to suffer," which may lead to a stock-market selloff and stall Fed hikes
  • Favors USD against basket of currencies in Asia, favours ... long high- yielding currencies versus low-yielding Asian currencies including CNY
  • "We believe these positions would perform well if tariffs were disproportionately imposed on the Asian exporters, or if growth were to unexpectedly slow in that region."
  • Pimco has modest underweight position in EUR, anticipating dovish ECB policy