
Strange Sell-Off In The Dollar Raises The Specter Of Investors Losing Trust In The US Under Trump
HuffPost
Economists fear enormous advantages could possibly disappear if faith in the currency's dominance was damaged.
NEW YORK (AP) — Among the threats tariffs pose to the U.S. economy, none may be as strange as the sell-off in the dollar.
Currencies rise and fall all the time because of inflation fears, central bank moves and other factors. But economists worry that the recent drop in the dollar is so dramatic that it reflects something more ominous as President Donald Trump tries to reshape global trade: a loss of confidence in the U.S.
The dollar’s dominance in cross-border trade and as a safe haven has been nurtured by administrations of both parties for decades because it helps keep U.S. borrowing costs down and allows Washington to project power abroad — enormous advantages that could possibly disappear if faith in the U.S. was damaged.
“Global trust and reliance on the dollar was built up over a half century or more,” says University of California, Berkeley, economist Barry Eichengreen. “But it can be lost in the blink of an eye.”
Since mid-January, the dollar has fallen 9% against a basket of currencies, a rare and steep decline, to its lowest level in three years.