Proposer of the "Dollar Smile Theory": The Dollar Will Fall Another 13% During Trump's Term

Stephen Jen, the author of the "Dollar Smile Curve" theory, has predicted that the dollar will continue to weaken and economic growth overseas will accelerate, further weakening the attractiveness of the dollar. Jen expects the dollar index to fall a further 13.5 per cent for the remainder of Mr. Trump's term, and that does not include a projected decline of about 7 per cent this year, which has put the dollar on track for its worst year in eight years. "The dollar's decline so far this year is largely due to the push factor, which is the US pushing capital out of dollar assets but not entirely attracted to Europe or Asia," said Mr. Jen. "We are still watching a soft landing for the US economy, which should help accelerate growth elsewhere." He also said that the Trump administration would need a further depreciation of the dollar to reduce the cost of U.S. manufacturing, as part of the administration's commitment to revive the industry.