Just two months into his second term, his escalating fusillade of tariffs and bid to roll back decades of globalization is shaking confidence in the US currency — which has had a privileged place at the heart of the world financial system for eight decades. The dollar has dropped against all but a handful of the 31 major currencies over the last three months, sending Bloomberg’s dollar index down nearly 3%, its worst start to a year since 2017. The price of gold — a rival haven — has surged to a record high of over $3,000 an ounce. By mid-March, speculative traders started betting against the dollar for the first time since Trump’s election amid fear his policy shifts could drive the world’s largest economy into a recession
“The rise and fall of currencies is not something that occurs because you get a wildcard president that is doing his best to kill globalization,” said Carmen Reinhart, a Harvard University professor and former World Bank chief economist. “The dollar did not overtake the British pound as a reserve currency overnight.”But Trump’s actions are rekindling long-simmering discussions about whether overseas governments will accelerate efforts to less reliance on the dollar. In Europe, leaders have seen it as an opportunity to strengthen the euro’s role by creating more integrated, liquid markets that would allow the common currency to better rival the dollar. In the developing world, a handful of countries have also periodically floated the idea of banding together to challenge the dollar’s supremacy. (Ed note: I believe that Trump is trying to pay off the US debt with cheaper dollars. Did you notice how the globalists do not like a capitalist?) (Read more)
