Plexus: The US dollar may further weaken, maintaining a higher allocation to non-US investment-grade bonds and emerging market currency bonds

Tim Murray, a strategist at PIMCO's multi-asset department, pointed out that since the beginning of 2025, the US dollar has significantly depreciated against other major currencies, and this trend is expected to continue. Key factors include divergence in monetary policy, questioning of the Federal Reserve's independence, fiscal deficits, and declining demand from foreign investors. PIMCO advises investors to adjust their portfolios by increasing allocations to non-US investment-grade bonds and emerging market currency bonds. The Federal Reserve's interest rate cuts and policy differences with other central banks may also impact the demand for the US dollar