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U.S. Dollar Set for More Weakness as ‘Brand USA’ Falls Further Out of Favour

  • The U.S. dollar has fallen about 10.6% from its January highs amid renewed selling pressure after Moody's downgraded the U.S. credit rating in May 2025.
  • This decline follows long-standing concerns about the nation’s $36.2 trillion debt, trade uncertainties, and diminished confidence in enduring U.S. economic dominance.
  • Foreign investors, especially in Asia, hold about $2.5 trillion in U.S. dollar assets, and any shift in hedge ratios could trigger significant selling pressure on the dollar.
  • Steve Englander emphasized that the decline of the dollar is expected to continue, while George Vessey highlighted that, based on valuation metrics alone, the currency still has significant potential to weaken further.
  • The downgrade and ongoing fiscal risks may amplify dollar volatility and encourage portfolio diversification, suggesting further dollar weakness despite the U.S. economy's current resilience.
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The Globe & MailThe Globe & Mail
+2 Reposted by 2 other sources
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U.S. dollar set for more weakness as ‘Brand USA’ falls further out of favour

Investors still see greenback as overvalued even after recent fall

·Canada
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The era of the dollar as an absolute king is exhausted and the emergence of a new global economic and financial order emerges, in which other forces and powers begin to gain ground from the U.S. currency, says Gabriel Manzano, head of the Citi Mexico Markets area. The dollar remains dominant and is far from being the hegemonic currency, but its leadership begins to erode, which represents risks as opportunities for markets like the Mexican one. …

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bipns.com broke the news in on Monday, May 19, 2025.
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