Eurizon CEO: The Dollar Will Lose 13.5% of Its Value

The Future of the Dollar: Expectations and Analyses

Stephen Jen, CEO of London-based asset management firm Eurizon, made significant statements regarding the dollar's future value decline despite its recent recovery. Jen believes that the dollar will weaken further as global economic growth accelerates.

The Dollar Smile Theory and Predictions

Jen has long predicted that the dollar will lose value and, in light of the famous "Dollar Smile" theory, he forecasts a 7% decline in the dollar index by the year 2025, followed by an additional 13.5% drop. In this context, the dollar's future weakness is noteworthy.

The Impact of the Global Economy on the Dollar

Jen noted that in times when the dollar had been strong in the past, deep recessions were experienced in the US economy, and thus it weakened during periods of limited growth. While the dollar has recently recovered some of its losses, it was emphasized that its significant movement in the upcoming period will again be downward.

Trade Wars and Economic Expectations

Despite challenging trade wars worldwide, there are promising developments in the performance of the global economy due to improved growth in Europe and China's competitive strength. This situation may lead to a decrease in the dollar's appeal. Jen stated that efforts by the Trump administration to revive the US manufacturing sector will require the dollar to lower costs.

Alternative Investments and Dollar Adjustments

Jen also pointed out that the increasing reluctance towards major reserve currencies like the dollar will lead to continued value appreciation of alternative investment vehicles such as gold and Bitcoin. As a result, it is indicated that the US is in the "third or fourth phase of a multi-year dollar adjustment."