The US dollar faces challenges as Donald Trump’s administration pursues policies that affect global trade and financial stability. Trump’s approach, including tariffs and tensions with China, has led investors to question the dollar’s role as a reserve currency. While some analysts predict a sustained decline in the dollar’s strength, others argue it is merely a correction from overvaluation. Key factors influencing the dollar include the Federal Reserve’s actions, Treasury Secretary Scott Bessent’s role, and the intensity of the US-China trade war. Additionally, geopolitical risks and shifts in global investment patterns, particularly among BRICS nations, contribute to the dollar’s volatility. The potential for a ‘yen-carry trade’ disruption adds another layer of complexity to global markets. Trump’s interactions with Fed Chair Jerome Powell and his trade advisor Peter Navarro further complicate the financial landscape. Despite these challenges, no clear alternative to the dollar’s dominance exists yet.
— new from Asia Times