Doubts persist about the dollar's status but it may remain dominant globally
From Yahoo Finance: 2025-05-04 07:34:00
President Trump’s tariff policies and attacks on the Federal Reserve have raised doubts about the safety of U.S. assets. While the dollar remains the most widely used currency in global trade, concerns persist about its weakening status. Analysts believe the dollar’s role is unlikely to shift significantly in the global economy.
Despite doubts, the dollar’s dominance as the pre-eminent global currency may remain unchallenged. President Trump’s actions have fractured confidence in U.S. assets, sparking a broader “confidence crisis.” The selling of U.S. dollar assets has led to an 8% weakening of the dollar against foreign currencies this year.
Some analysts believe the worst may be over for the dollar’s decline. While U.S. financial markets and companies are still attractive for investment, global asset managers are reconsidering their U.S. exposure. Gold, German bonds, and emerging markets are gaining popularity as safe haven alternatives amidst U.S. uncertainty.
Investors are rethinking their heavy U.S. exposures and exploring other asset options. While some believe the shift away from U.S. assets is tactical rather than a fundamental reassessment, the future remains uncertain. Trump’s policies have spurred capital to stay domestic, but analysts are watching for potential changes.