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On this illustration, made on April 25, 2025, banks and a decrease in shares are visible.
Date of Ruvi | Reuters
Richard Nixon was his worst performances, as the US dollar threatens many winds that are heading in the second half of the year, which may have important consequences for investment.
Greenbeck crashed 10.7% against its global peers by June, which made it the worst than the first half since 1973, when Nixon broke the gold standard Bretston Woods. The lowest point has reached the lowest point since February 2022.
The way ahead may not look much brighter.
This is because many the same factors are policy instability, debt Reduced rates from the federal reserve systemJust call a few – probably will remain in the head of investors when they are looking for other ways for safe shelter.
Drop in dollar
“Some of this were probably linked, and then we certainly gave the currency traders enough to think about what the catalyst is now,” said Art -Hogan, the main market strategist B. Riley Wealth Management. “You can check out a lot of boxes. You work with a massive deficit, and no one wants to stop it on either side of the passage. You feel friends as a military and trading. You have enough potential negative catalysts. And as soon as the impulse begins, it’s hard to stop it.”
Indeed, the dollar sliding began in mid -January and since then showed only random signs of moderation. Hopes it hopes President Donald Trump’s tariffs It would not be as steep as the thought helped to ignite a short rally in mid -April, but for the most part the gravitational attraction was lower.
Influence on the market
Of course, the dollar slide was not poison for stocks.
With more than 40% of the S&P 500 companies coming from international sales, a weaker dollar helps make US exports cheaper, which is important to consider a long trade war.
However, the move below coincided with the growth of the chatter about the potential end of the American exceptionalism and hegemony in dollars, and the public share in the US approaches $ 30 trillion, and the 2025 deficit on the track by almost $ 2 trillion. If American assets such as Greenback and Treasury will lose their fame in the world stage, it may have great consequences for risk assets like stocks.
Global Central Banks, first, increase their gold purchases to 24 tons a month, according to the World Gold Council as an alternative to the US asset. Gold had the best run in the first half since 1979.
“We believe that the central banks buy gold to diversify reserves, reducing dependence on (dollar) and heding from inflation and economic uncertainty,” Lawson Winer said. Winder said this is “a trend that we think will continue, especially against the background of uncertainty related to the US tariffs and the shortage of deficit.”
Similarly, TS Lombard retains a short position on Greenback, which he calls “a gift that continues to give.”
“Trump’s attacks on the Fed and the obvious desire of the administration to the weaker dollar only add to this look,” wrote Daniel von Allen, senior macro -strateg. “The dollar remains inflated on most FX metrics … with ubiquitous USD negatives, why not expect that the dollar will become undervalued? We remain solid for a number of bidding in our book.”
The Federal Reserve can also exert more pressure down, experiencing the expected rate in the back of the year. However, the impact on loosing the Fed can be difficult, given that the dollar and the Treasury increased sharply when the central bank last declined in 2024.
Hope on the appeal
Certainly, the constant dollar decline is not at all sure, and others on Wall -Restitis believe that the trend can change.
Thomas Matthew, the head of the Asia -Tzak -Tzak -Tzak -Tzak -Company company Capital Economics, said the recent action rally indicates comfort with the US assets, and the earlier weakness of the dollar, perhaps, just a product designed to other currencies, as well as switching the hedge strategies.
Wells Fargo also believes that the dollar fears are blocked.
“By accepting the statistical approach to the role of the US dollar, we realized that the green appeal remains a battleship of global trade and finance and far from insignificant,” Wells Fargo Timmerman’s investment strategy wrote. “We believe that the US dollar is beneficial from the deep preferences (such as the rule of law, transparency and high-liquid financial market), making a global shift from the dollar extremely complex and slow-process because of the main weaknesses of the most visible alternative alternatives.”
Finance Minister Scott Igred also weighed, saying CNBC on Monday that currency fluctuations “do not come out of the usual”.
However, increasing the revenue of the Treasury debt also means that the US dollars and other assets are concerned.
“We are in this stage of transfer with the lack of impetus,” said Hogan, strategist B. Riley. “But in principle, you could definitely throw away many things that care.”
