Dollar Decline Revives Safe-Haven Fears
The US Dollar Index has seen a recent decline of about 2% since late July, making it the weakest G10 currency over the past week.
This development raises questions about the dollar's safe-haven status and its role as the world's primary reserve currency. According to Rabobank's Senior FX Strategist Jane Foley, the dollar's rally during the Middle East crisis may be coming to an end.
The recent losses in the value of the US dollar were also seen after Trump's tariffs announcements in April 2025, which undermined confidence in the dollar as a safe haven. The subsequent decline in the dollar and US treasuries sparked discussions about the pace of de-dollarisation and the dollar's place in international payments systems.
Despite this, the dollar has proven to be a reliable safe-haven currency since May, with additional support from Fed rate hike speculation. However, the recent decline has stirred up fears that last year's negative sentiment could return.