DoubleLine CEO Jeffrey Gundlach believes that the U.S. dollar has finally hit a bottom — at least for now.
The dollar index, which tracks the greenback against a basket of six major currencies, hit a more than 2-year low of 91.011 on Friday as investors worried about the short-term impact of Hurricane Irma and North Korean tensions on the U.S. economy.
"The dollar for the short term has bottomed," remarked Gundlach, saying the coming bounce could cause the dollar index to "grind" higher to the 96 or 97 level.
"But I don't think it's going to endure," he added, predicting the greenback "ultimately takes another leg down."
Gundlach's comments came during his Tuesday webcast for investors in one of his mutual funds, the Double Line Total Return Bond Fund.
As one of the few investors on Wall Street to accurately predict Donald Trump's election victory in 2016, Gundlach noted that the dollar originally rocketed upward following the election but has since fallen sharply off those highs.
Reiterating some of his previous concerns surrounding the market, he noted that now is not the time to be accruing risk.
"I think this a very poor time to be taking a lot of risk in bond funds," he said, specifically urging investors away from junk debt.
Gundlach also noted a drop in commercial and industrial loan growth as an area of concern for U.S. markets.
In the past, the Federal Reserve had already started to "ease interest rate conditions with this drop in loan growth of this magnitude ... But this time the Fed wants to raise rates," Gundlach said.
He noted that the success of equity market appears to be tied to a worldwide policy of quantitative easing by major central banks, making him anxious for future balance sheet rollbacks and the market next year.