The U.S. dollar will get stronger and top its 2009 levels, DoubleLine Capital LP’s Jeffrey Gundlach said at a fund-industry conference.
“I still think the dollar is the place to be,” Gundlach said yesterday at ETF.com’s Inside Fixed Income Conference in Newport Beach, California. “I’m quite confident it will take out the high of 2009.”
The currency climbed to a one-week peak yesterday against its major peers as an unexpected increase in the nation’s cost of living in September underscored the strength of the world’s largest economy amid a slowdown in global growth. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 other currencies, was 6.7 percent off its March 2009 high as of 9:24 p.m. in New York.
The dollar could rally for years, Scott Mather, manager of the $201.6 billion Pimco Total Return Fund, told the conference.
Gundlach, 54, whose DoubleLine Total Return Bond Fund has $37.6 billion in assets, said the fixed-income market could be headed for one of its best years ever, setting up for a possible reversal in 2015.
It’s a “no-brainer” for Germans and Spaniards to put their money into U.S. Treasury securities, said Gundlach, whose main fund beat 94 percent of rivals in the three years ended Oct. 21.
The Los Angeles-based money manager also said that Saudi Arabia wants crude oil to reach $70 a barrel, a decline that would hurt its enemies in the Middle East. The U.S. hydraulic fracturing, or fracking, industry wouldn’t be able to compete at that price level, he said.
Pacific Investment Management Co., the $1.87 trillion firm that Bill Gross departed last month, has been betting on dollars and against other currencies such as the euro and the Japanese yen, said Mather, chief investment officer for U.S. core strategies.
“We think there’s a good cyclical case to be made for that, and importantly a good secular case,” Mather said. “This should last multiple years in terms of a strong-dollar theme.”