Deutsche Bank has warned that the US dollar might lose its status as a safe choice for investors because the global situation is changing quickly. According to George Saravelos from Deutsche Bank, these changes in international relationships and economics are happening at an unusual speed, and they need to be recognized.
Recently, the value of the dollar dropped unexpectedly, even though the US was imposing tariffs on its trading partners, which normally would have made the dollar stronger. Saravelos pointed out that the dollar’s connection to risky investments is weakening, and the US is facing a growing trade deficit, meaning it buys more from other countries than it sells to them.
The situation is also influenced by Europe increasing its defense spending since the US is stepping back from providing security in the region. This has led Deutsche Bank to reconsider their previous negative outlook on the euro, suggesting a more general trend of the dollar possibly becoming weaker. They believe two key parts of America’s global influence—its support for Europe and commitment to fair trade—are now being questioned.
