Fear of unpredictable trade policies under President Trump is causing investors to question the stability of the US dollar. Following the April 2 tariff announcement, the dollar's value has been on a decline, while US stock markets have recovered. Concerns about a potential recession and the erosion of the dollar's dominance as a global safe haven are leading to a confidence crisis, as noted in a Deutsche Bank analysis. The economic implications of this shift could be significant for both the US and global economies.
The severe and erratic nature of Trump's international trade policies has raised the possibility of a US recession later this year, denting demand for America's currency.
Trump's tariff blitz is also forcing investors to confront the possibility that the dominance of the dollar might be fading, or even coming to an end.
For close to a century, the US has been the world's investment safe haven, but investors are now starting to worry about the long-term safety of the dollar.
A board displays the exchange rates of the Mexican peso against the US dollar, highlighting the global impact of US financial policy shifts.
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