Pimco: Dollar May Lose Value as Status Erodes

Dow Jones Newswires

Pacific Investment Management Co. said the U.S. dollar could weaken as its reserve currency status erodes, even without a viable alternative.

There are "many reasons to expect a secular decline in the value of the U.S. dollar," a Pimco portfolio manager, Curtis Mewbourne, wrote in a report seen Wednesday on the company's Web site.

"And while we have not yet reached the point where a new global reserve currency will arise, we are clearly seeing a loss of status for the U.S. dollar as a store of value even in the absence of a single viable alternative," Mr. Mewbourne wrote.

"In combination with other factors, that likely means a continuing devaluing of the U.S. dollars versus other currencies, especially the EM (emerging market) currencies."