
 The Flip Side
 The Flip Side Is this the end of the dollar as we know it?
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 May 12, 2025  Themos Fiotakis, Head of FX Research at Barclays, discusses the uncertain future of the U.S. dollar amidst shifting trade policies and market sentiments. He delves into how trade wars and tariffs are impacting the dollar’s global status and investor confidence. The conversation highlights concerns over the long-term de-dollarisation of reserves and the challenges posed by U.S. trade deficits. Fiotakis also touches on geopolitical factors influencing the dollar's dominance and explores light-hearted topics like travel plans related to currency strength. 
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Targeted Policies vs Blanket Tariffs
- Targeted trade policies could strengthen the dollar if they counteract foreign protectionism effectively.
- Blanket trade wars risk reputational and cyclical damage to the dollar and U.S. economy.
Market Shifts to Dollar Bearishness
- Shifts in foreign fiscal policies and reactions have turned dollar sentiment from bullish to bearish.
- Market positions moved from maximum dollar longs to maximum shorts within months, reflecting changing investor confidence.
Foreign Capital Supports Dollar
- Massive foreign capital inflows have buoyed the dollar but are vulnerable to moderation amid U.S. deficits.
- Reversing these inflows would be a major, extraordinary shift that markets may underestimate.
