Dollar to Fall Quite a Bit in Coming Months: AxiCorp’s Innes

very simply how much further does the

dollar have to fall what's your view on


i think it's quite a bit to fall um in

the coming months uh basically

we've got a huge boost uh for for the


and in the form of the uh eu agreement

this is really really solid

and this is where we've continued to see

the dollar weaken after that agreement

went through but look

the us has lost his tail went from

interest rates we're going to get that

even reinforced this week at the federal

reserve board

moves out moves away from stabilization

back to accommodation

the shortage of u.s dollars is gone and

you know what's really holding the

dollar in place right now is equity


we're seeing that exceptionalism fade

right now so as opposed to a gradual

decline we might even see a freefall if


u.s equity markets continue to decline


so that is just by potentially getting

another stimulus package being

secured later on this way and despite

the fact that we are

you know cautiously starting to see the

signs of a stabilization when it comes

to virus cases

this is the one thing why i think

there's the bears

uh are or i should say the balls are

being a little bit

reticent to fall into that bear trap

right now there's a lot of uh

noise going on in the background we've

got the u.s china trade tensions that

continue to simmer

we've also got the fact that stocks

didn't make um

that make runs higher on good numbers

and that's a worrying sign

and obviously behind the cover narrative

there's still that lingering economic

beat down

it's almost we're going to almost move

to what i believe is like a growth

divergence trade

those economies that emerge from a cove

quicker are going to do better therefore

the currency appeal

right now the us is lagging in that but

listen never count out the power of the

us consumer and that's one thing we have

to keep

always threatening focus when we're

shorting the dollar

and of course dollar weakness has also

helped some commodities especially the

gold and other precious metals really

rallying and that's

not only because of the weak dollar of

course it's a macro environment this gtv

chart on the bloomberg uh steven also

showing the relative performance of

precious metals when it comes to the

broad commodity markets as a percentage

of balance sheets as a percentage of gdp

continues to rise those balance sheets

and central bank easing

we have seen a gold futures pricing at a

record right now how much further up can

it go

it's interesting um you know we're

looking at investors right now with the

dollar falling over the last couple of

weeks quite quickly

uh they're out looking for alternative

assets to hex that falling dollar

obviously gold has been in the highlight

i think uh

gold is a little bit more to go here i i

don't think

you can give up right now clearly i

think it's going to breach the the 1920

level which is really the big all-time

high here but i think what it's

getting triggered by mostly um it's the

beneficiary um

not only of safe haven demand but it's

also the beneficiary of falling yields

and this is

really the key signpost so if you factor

in another two percent decline in the

u.s dollar broad trade weighted average

perhaps another 35 percent rise in

10-year inflation breakevens that would

move us to about 185

and perhaps nominal yeah a 10-year

treasury yields falling and let's say

another 30

basis points to sort of around that uh

0.25 level i think

that'll put us up to 2000 but for me


very much tied in the hip to what uh

bond yields are doing

so the question is rather can goal keep

on rallying there's really

one of which can real yields keep on

falling so i think we have to be really


of how the real yield markets are are

playing out right now