As the U.S. dollar remains under pressure, its status as the “reserve currency” has come into question. Experts are highlighting the current administration’s intentions to reshape global economic linkages, along with a market reaction that suggests a potential erosion in its status.
What Happened: The U.S. dollar index has declined 8.21% on a year-to-date basis as of the publication of this article. This decline was accelerated by the surprising market response to the administration’s announced reciprocal tariffs in early April 2025.
A recent study titled ‘Dollar Upheaval: This Time is Different,’ by five experts, including Zhengyang Jiang, Arvind Krishnamurthy, Hanno Lustig, Robert Richmond, and Chenzi Xu, highlights that “Between April 4 and April 14, the U.S. dollar depreciated by 3.6%.”
“Normally, in times of global volatility… the dollar appreciates as dollar-denominated assets benefit from a flight to safety. Not this time around,” the note stated.
This unexpected depreciation suggests a disconnect between traditional market dynamics and the dollar’s current performance. “If U.S. Treasuries are no longer viewed as the world’s preferred safe asset, then the status of the dollar as the world’s reserve currency may be called …Full story available on Benzinga.com
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