Since the 1970s, the US currency has been repeating a 15-year cycle of losses and gains, and the greenback has now entered the phase of declines, Lindahl said.
“When investors learn about the 15-year cycle, they are initially skeptical and doubt it exists,” the analyst said, as quoted by Bloomberg. If non-US investors don’t hedge against the dollar, they could face the “riskiest investment climate in 45 years,” Lindahl added.
The analyst predicts that the dollar will fall to $2 per euro and 75 yen per dollar by 2024, corresponding to 41 percent and 33 percent losses, respectively. Lindahl notes that the cycle of losses and gains is a usual pattern for economy, investors don’t see it when it concerns the dollar.
From the economic standpoint, Lindahl cites the following factors for the greenback’s decline: a likely slowdown in US economic growth that will result in a market slowdown, political turmoil, and the dollar’s overvaluation on a purchasing-power-parity basis against almost all major currencies.
The dollar has strengthened this year against the euro, trading at $1.1542 on Wednesday compared to $1.25 at the beginning of the year. The US currency has slightly weakened against the yen in the last 12 months.