

Is the US dollar losing its dominance?
Apr 24, 2025
Joining the conversation are David Lubin, a senior research fellow at Chatham House with a background in emerging markets investing, and Isabelle Mateos y Lago, chief economist at BNP Paribas, formerly with the IMF. They dive into the shifting dynamics of global finance, questioning if the U.S. dollar is losing its dominant status amid rising alternative currencies. They discuss the geopolitical ramifications of China’s strategic financial moves, America’s tariffs, and what these changes mean for the future of economic power and stability.
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Dollar Status vs. Exchange Rate
- The dollar's reserve currency status and its exchange rate level are distinct concepts that are usually separate.
- Some voices in the Trump administration conflate these, seeing reserve currency status as making the dollar overvalued, harming U.S. manufacturing.
US Treasuries Losing Safe Haven Status
- The usual safe haven demand for US Treasuries has diminished amid current market volatility.
- Investors have preferred bonds like Swiss franc and Japanese yen, signaling shaken confidence in the dollar's safe haven status.
Eroding Trust in US Debt Safety
- Concerns about inflation and political unpredictability, such as threats to the Fed's independence, undermine trust in U.S. debt.
- A policy paper proposing charges for foreigners holding US treasuries adds to investor uncertainty and instability.