Asylum status in US dollars under threat, warns by fund executives

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The US dollar status as a shelter for global capital may threaten the wrong policy and growth of trade barriers, the funds were warned.

On Friday, the currency fell to a three -year minimum against the euro, continuing the slide last week after President Donald Trump announced steep “mutual” tariffs on the US trading partners.

The transitions caused anxiety among investors who warned of a “tectonic shift” for the global economy when the dollar can no longer hope to provide shelter during periods of market instability.

“There is (now) a very good case for the expulsion of the US dollar,” said Bob Michel, Chief Investment CEO JPMorgan Asset Management, with $ 3.6 TN led.

For decades, the relative stability of the US economy has allowed the dollar to function as a world reserve currency – conducted by central banks around the world.

This allowed the US to borrow with a low cost and fund the “twins deficit” on the current account of the country and its government budget.

But the simultaneous sale of shares, bonds and dollars in recent days caused by an aggressive presidential trade program indicate the loss of faith in the US assets among international investors, money executives said.

“Trump’s chaotic policy undermines the US position as a safe asylum,” said Bert Flossbach, co-founder and chief director of Flossbach von Storch investment, the largest independent German asset manager.

“Of course, there is a chance that increasing the uncertainty of the US policy can lead to shifts in the use of the dollar in the world economy,” said Brad Setiser, an employee of the Foreign Relations Council.

Edward Fishman, author OvenA book about the US economic war, it is said that in addition to Trump’s tariffs, the President’s threats to the rule of law and independence can also harm the dollar’s attractiveness.

He predicted that over time, this could lead to the transition to a “multipolar” system in which currencies, including the euro, play a greater role.

The dollar drop is especially unusual because global financial stress usually strengthens the currency as investors rush to assets intended for dollars, such treasury bonds that are considered asylum.

Economists also stated that the currency of any country, which imposed import duties, had to strengthen.

Mike Reddel, a fixed income portfolio at Fidelity International, said the recent sharp step is above the dating long government bonds combined with the US dollar looks like a “old capital flight”.

However, in the past, the US president’s economic advisers emphasized the costs that came with a strong dollar.

Stephen Miran, Chairman of the Trump Economic Advisors Council, claimed to the president’s inauguration that the status of the dollar as a world reserve currency was artificially overlooking the exchange rate, undermining the world competitiveness of US production.

Economists challenged the Miran argument and caused concern that his reasoning could force Trump administration to take additional steps to oppress the dollar value.

Michael Kautzberger, Global Fixed Profit Director at Global Investors Allianz, said: “The more escala the conflict, people think that there may be the following steps?”