Resume af teksten:
Den amerikanske dollar har oplevet en betydelig svækkelse, især efter Donald Trumps uforudsigelige handelspolitik, som kulminerede med indførelsen af gengældelsestold. Denne udvikling har udfordret opfattelsen af dollaren som en sikker havn, især da politikker har undergravet tilliden til amerikanske aktiver og institutioner. Med fortsatte høje budgetunderskud og pres på Federal Reserve for at sænke renterne, er der mulighed for yderligere devaluering af dollaren. Investorernes fokus på USA’s finanspolitik og “twin deficit” understreger en svækket position, især hvis investeringsindstrømningerne ikke opvejer de strukturelle udstrømninger. Der er en teoretisk mulighed for, at ændringer i politisk adfærd og økonomisk vækst kan genoprette tilliden i fremtiden, men den nuværende vurdering er, at dollaren vil forblive presset.
Fra Julius Bär:
Short term: The decline of the US dollar
Up to the 5 November US elections and beyond, the USD saw a renewed bout of strength. This was because markets were eagerly expecting president-elect Donald Trump to extend the exceptionalism of US assets through pro-growth policies such as deregulation, government efficiency, and further corporate tax cuts. This optimism started to crumble when confrontative trade policy aimed at key trading partners became increasingly visible. The erratic nature of policymaking on the trade front, culminating with the announcement of punishing reciprocal tariffs on Trump’s ‘Liberation Day’, 2 April, provoked a following leg of rapid USD weakening by more than 10%.
Negative US dollar sentiment has been spreading in markets, with investors questioning the US dollar’s safe-haven character. This is especially as the currency had decoupled from US interest rates in the wake of the Liberation Day shock. Further developments, such as the recent passing of the ‘One Big Beautiful Bill Act’, cementing high budget deficits and an unsustainable debt trajectory, and the constant pressure on the Fed to lower interest rates, have further undermined investors’ confidence in the US dollar. We therefore believe that the US dollar has entered a longer-term bear market fuelled by policies that bypass checks and balances, and promotes distrust in US assets and ultimately challenges the value of the US dollar.
Challenges to the safe-haven status
Recently, the US dollar didn’t increase in value when financial markets became volatile. This has raised doubts about the US dollar’s safe-haven characteristics. However, looking back at history, it’s not uncommon for the US dollar to lose value when the US is the cause of increased uncertainty. The recent “tariff shock” from Donald Trump’s “Liberation Day” on 2 April affected the US economy more than other countries, which contributed to the US dollar’s weakness. The idea that the US dollar is a safe investment typically only kicks in when the global economy is slowing down or in a recession. A good example of this is the 2008 financial crisis, which started in the US. Initially, the US dollar lost value, but as the crisis spread globally, the US dollar eventually strengthened, showing its safe-haven qualities. So, while the US dollar may not always behave like a safe haven, it tends to do so when the global economy is under stress.
For the US dollar to lose its status as a safe investment (or “safe haven”), there would need to be more policies that undermine the things that make it stable and trustworthy. Specifically, policies that weaken institutions and threaten property rights. President Trump’s approach to making decisions, often using executive orders and bypassing traditional institutions, increases the risk to the stability of the US system. This approach continues to pose a threat to the US dollar’s reputation as a safe and reliable investment.
Medium term: More weakness ahead
So far, the roughly 15% depreciation has reduced some of the US dollar’s previous high valuation. However, the currency remains still highly valued, suggesting that more room for depreciation remains. We think that a further devaluation is possible for the following reasons:
1. Trump’s erratic policy making
The erratic nature of President Trump’s policymaking may well continue, and the distrust of markets remains. Trump will likely continue to pressure partners to concede to deals by conjuring up economic pain. This headwind for the US dollar softens as investors have arguably become less sensitive to policy announcements – with some believing in the TACO (Trump always chickens out) narrative. There is also a decent chance that the endgame in the tariff saga yields trade deals that bring about lower reciprocal tariffs rather than the worst-case scenario. Overall, we expect that the probability for further bad news that triggers volatility remains higher than many market participants hope. This will likely continue to deprive US assets of their exceptionalism and keep the general distrust of the US dollar in place.
2. Investor focus has shifted
Investor focus has shifted decisively to the fiscal front. On the back of the OBBBA that keeps fiscal strains high, US government debt could eventually become less popular to hold, even if there are only a limited number of alternative safe-haven assets. The extension of large public deficits and the large, rising interest rate burden adds pressure to the Fed to lower interest rates, reducing the interest rate advantage that the US dollar still provides. These mechanisms may maintain distrust in US assets and the US dollar at elevated levels.
3. US budget deficit and trade deficit facilitate dollar weakening
The structure of the US ‘twin deficit’ (combined budget deficit and trade deficit) facilitates US dollar weakening when investment inflows do not compensate for structural outflows. With investors likely to hold back with investment in US assets, particularly in US government debt, the reduced inflows will provoke a continued depreciation of the US dollar, and with that a continuation of the observed US dollar bear market, further reducing its overvaluation.
Political motivation for depreciation
A desire of the US administration for a weaker US dollar has been highly debated since President Trump’s inauguration. Speculation about a so-called ‘Mar-a-Lago’ agreement to engineer a weakening of the US dollar, similar to the 1985 Plaza Accord, in order to reduce trade imbalances, has however receded. Should the Trump administration at a later stage introduce previously floated financial repression measures, we would see a case for the US dollar further losing its safe-haven properties. The installing of a Trump-proxy as the next Fed chair, increasing the administration’s control over monetary policy, could also erode confidence in the independence of monetary policy and US institutions in general.
Long term: A positive risk scenario
There is still a chance that erratic policymaking recedes in light of the 2026 midterm elections, or simply as a result of realising the economic damage created. In such a case, there is a possibility for trust in US assets and the US dollar to return, restoring the exceptionalism and leading to a renewed increase of inflows. In fact, the US is still expected to expand faster and offer higher interest rates than its peers in 2026. Shifting attention to the returns on assets determined by growth and interest rate differentials, away from returns of assets determined by the credibility of the institutional framework, would brighten the outlook for the US dollar. In such a scenario, the US dollar could follow a similar path to the one of the first Trump presidency, when the US dollar depreciated by roughly 10% in the first year of the term, due to the trade war with China, and started to recover with the shift to growth-friendlier policies ahead of the midterm elections.
Find out more about the current investment environment in our Market Outlook Mid-Year 2025.
Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
