The U.S. Dollar Is Losing Its Position As A Reserve Currency
In the past, President Trump has never hidden his disdain for the Fed and its hawkish policies, repeatedly drumming up the fact that the central bank’s interest hike regime was contributing to an overly brawny dollar and a sluggish economy. Trump had even gone as far as asking the White House to explore ways to weaken the currency in a bid to boost exports and spur economic growth.
The dollar has strengthened for much of the past decade, something that has been blamed for the U.S.’ ballooning deficit.
But now Trump is finally getting what he has always wished for: A weaker dollar, albeit not exactly on his terms.
After hitting a 3-year high on 20th March, the Dollar Index--a measure of the currency’s strength against a basket of six international currencies--has declined nearly 11% in one of its most dramatic slides in years. The greenback has fallen so much that hedge funds have turned bearish against the currency for the first time in years.