The Dollar Doesn't Face a Free-Fall Risk: Doll

The dollar will continue to drift but it doesn't face the risk of a free-fall, while healthcare stocks will rebound once the dispute over healthcare reform is settled, Robert Doll, BlackRock vice-chairman, told CNBC Wednesday.

Renewed questions about the greenback's status as a reserve currency have pushed it near the year's lows against a basket of currencies.

"I think what's happening is folks are saying the US has problems," Doll said, adding that the issue of the country's budget deficit and increased government spending puts pressure on the dollar.

But the dollar decline is likely to be limited, as other economies whose currencies could replace it as reserve currency – such as the euro-zone or Japan – are not in much better shape than the US.

"We could have the dollar drifting in either direction with a bias to the downside," Doll said. "The simplest way to predict the dollar is to understand risk appetite."

Traditionally the dollar fell when investors' risk appetite was growing, but this time the rise in gold prices seems to suggest that the greenback is not considered a refuge against risk any longer.

Gold is a better hedge than currencies because it also protects against inflation, and there are also valuation problems, as the 3.5 percent yield offered by 10-year Treasurys "is not a great deal," Doll said.

Healthcare stocks are a good buy opportunity now, as their prices have fallen because of uncertainty regarding the outcome of the reforms initiated by President Barack Obama, he added.

"We would be adding the healthcare stocks," Doll said. "I don't think we'll get a strong lift until there's resolution but when we do, the stocks will lift."