The dollar is tumbling. It can fall further.

Copyright © HT Digital Streams Limit all rights reserved. Ian Salisbury, Barrons 3 min read 16 Apr 2025, 08:15 am Ist Trump’s rates hit dollars, raising doubts about the US status of US Haven and long -term growth. Summary An unusual dynamics has resulted in some concerns that US investments are losing their appeal as a global safe haven. The WSJ Dollar Index has been down approximately 3.7% since April 2. The dollar had a difficult month. It could fall further if President Donald Trump’s trade war soured the appetite for foreign investors for US assets and the US economic growth was hampering. The WSJ dollar index has been around 3.7% since April 2, when Trump unveiled his controversial plan to set up so-called reciprocal rates on goods imported from dozens of nations. While the Greenback rose 0.3% on Tuesday, the profits follow a five-day loss line, according to Dow Jones Markets data. In total, the dollar has tumbled more than 9% since the 52-week peak in January. In addition, the weakening of dollar is accompanied by rising US bond yields, an unusual situation that has resulted in some people worrying about losing their appeal as a global safe haven. In a note Tuesday, marketkeeper Yardeni theorized that the sale of the dollar is linked to investors who are moving money from US assets and in European counterparts, given the recent profits by the euro. The firm added that Chinese state asset managers can also sell treasuries and buy European bonds as a form of economic retaliation against the Trump administration. “If just a little selling pressure by foreign investors could cause so much anxiety in the US financial markets, it would indicate that the US fiscal situation is very fragile,” the firm wrote. Given its relative strength over the past few years, the dollar may continue to decline. Despite the fact that he has tumbled sharply over the past two months, the Greenback remains about 20% above his long -term average against other major currencies, Goldman Sachs chief economist Jan Hatzius noticed on Monday. In addition, Hatzius suggested that the protectionist position of the US government could further undermine the so -called US exceptionalism, which contributed to the US major stock market profits over the past few years. “Perhaps more importantly, the turn to protectionism has weakened the matter for US growth, not only in the short term, but also in the longer term,” Hatzius wrote. For investors, the immediate impact of the weaker dollar is mixed. In theory, a weak dollar must make it cheaper for foreign consumers to buy US goods, which can increase earnings at US businesses. Of course, a trade war that throws up retaliation tariffs against US goods will do it all. The drop of the dollar has benefited US investors who own foreign stocks. A weaker dollar makes foreign company earnings relatively more valuable to US investors. Over the past 100 days, the MSCI Europe Equity Index has performed the S&P better by almost 16 percentage points, co-founder Nichalas Colas, data, said on Tuesday. Almost half of this better performance is due to the reinforcing pound and euro, he calculates. The great risk of long -term is that Trump’s saberrattling will eventually underline the belief in foreign investors in the dollar as a global currency for safe haven. Although the prospects seem remote, it is no longer one that investors should discharge from hand, according to a Deutsche Bank note. “The world is facing a dollar troubles crisis, as the effects of ‘Liberation Day’ continue to echo, ‘wrote analysts Marion Labours, Camilla Siazon and Jim Reid, citing the label that Trump revealed his tariff on April 2. added: ‘The US excessive privilege to be able to finance his twins comfortably [trade and budget] Shortages are perhaps the biggest result of recent events, and can eventually determine how far the US administration can continue this policy. “Write to Ian Salisbury at ian.salisbury@barrons.com. Catch all the business news, Market News, break news events and latest news updates on live currency. Download the Mint News -App to get the markets market.