By Heraldviews
The
U.S. dollar fell for a fifth consecutive day on Monday, with the DXY index
hitting a three-year low as investors continued to reassess the currency’s
dominance in global markets. The dollar has declined more than 4% since early
April, when President Trump declared "Liberation Day" amid escalating
trade tensions.
Analysts
attribute the slide to growing concerns over U.S. economic policy
unpredictability and the lingering threat of renewed tariffs on Chinese goods.
While Mr. Trump has insisted the dollar remains "the currency of
choice," market strategists warn that erratic policymaking is undermining
confidence.
"There’s
no immediate alternative to the dollar, but the incoherence in economic policy
is creating real jitters," said Michael Brown, senior strategist at
Pepperstone. "De-dollarization is now a real, and frankly scary, prospect."
Trade War Fallout
The
dollar’s decline accelerated after the U.S. imposed steep tariffs on Chinese
imports, raising fears of prolonged inflation as American businesses struggle
to find substitutes for Chinese goods. ING analysts noted that the tariffs have
exacerbated the currency’s weakness, with investors shifting toward perceived
safer assets.
The
euro has emerged as a primary beneficiary, rising 5% since early April. ECB
officials have subtly positioned the currency as a stable alternative, while
the British pound, though up 2% against the dollar, has lagged due to the UK’s
reliance on global economic health.
Market Uncertainty
Despite
the Trump administration’s temporary pause on some tariffs, analysts caution
that the threat of renewed trade barriers continues to weigh on the dollar.
"The prospect of those levies returning will linger," Brown added.
As
markets adjust to the shifting landscape, the dollar’s slide underscores
broader anxieties about U.S. economic leadership, and whether the world’s
reserve currency can maintain its supremacy amid geopolitical turbulence.
With additional
agency report
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