PIMCO warns of further dollar dip

SYDNEY: Pacific Investment Management Co, which runs the world's biggest bond fund, said the dollar will weaken as the US pumps "massive" amounts of money into the economy.

The dollar will drop the most against emerging-market counterparts, Curtis Mewbourne, a PIMCO portfolio manager, wrote in a report on the company's website. The greenback is losing its status as the world's reserve currency, he said.

"Investors should consider whether it makes sense to take advantage of any periods of US dollar strength to diversify their currency exposure," Mewbourne wrote in his August Emerging Markets Watch report. "The massive amounts of US dollar liquidity produced in response to the crisis" have helped reduce demand for the currency, he wrote.