Core Viewpoint - The article emphasizes that investors should consider adjusting their portfolios in light of a potential further decline in the US dollar, with a recommendation for higher allocations to non-US investment-grade bonds and emerging market local currency bonds [1] Group 1: Factors Influencing Dollar Weakness - The US dollar has significantly depreciated against other major currencies since early 2025, and several factors suggest this trend may continue [1] - Divergence in monetary policy is evident, as the Federal Reserve has recently begun cutting interest rates while other major central banks have halted or are nearing the end of their rate-cutting cycles, which narrows the interest rate gap and typically reduces demand for the dollar [1] - The independence of the Federal Reserve is being questioned, particularly due to political pressure from President Trump to lower interest rates despite high inflation, which could undermine confidence in the dollar [1] - The US government's substantial fiscal deficit continues to exceed tax revenues, raising concerns about a potential sovereign debt crisis that could lead to a significant weakening of the dollar [1] - There is a declining demand from foreign investors for US assets, particularly US Treasury securities, influenced by the Trump administration's trade and foreign policy stance, which has diminished the appeal of holding US dollar-denominated assets [1]