New Trade Policies Threaten Dollar’s Safe-Haven Status
PIMCO, a major asset manager overseeing $1.7 trillion, is sounding the alarm on the future of the US dollar.
In a recent note, the firm’s analysts argue that America’s position as the center of global finance is looking increasingly fragile, largely due to the Trump administration’s aggressive new trade policies.
With fresh tariffs hitting all imports at a rate of 10% and additional levies targeting specific countries, concerns are growing that the US dollar and Treasuries could lose their safe-haven status. PIMCO suggests that these moves, aimed at boosting domestic manufacturing, could end up pushing global investors toward bonds from Europe, Japan, the UK, and emerging markets instead.
For decades, the dollar has been the world’s dominant reserve currency, but PIMCO warns that this role isn’t immune to political upheaval. A shift away from US assets, they say, could lead to a more fragmented global financial system without a single dominant currency.
The market’s reaction has already been sharp. The US dollar index (DXY) plunged around 6% this month, a drop not seen since the aftermath of the 2008 crisis. The index slid from an April open of 104.18 down to 97.92, underscoring the growing anxiety about America’s economic future.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
