Witnesses of the US dollar are the deepest segment in 16 years, as Bond Beheemoth warns the state of the global reserve “non -guaranteed”: Report
The asset manager, at a value of $ 1.7 trillion, fluctuates on the US dollar, warning against Trump to stimulate the American industries by increasing the customs tariff for the US dollar’s dominance.
Analysts at Bond Giant Pacific Management Company (Pimco) says in an investment note that President Trump’s trade war sparked uncertainty about the situation of the US dollar and weight as safe assets,, Reports Reuters.
Pimco Market Strategic experts say that investors are now wondering whether American assets will remain an anchor of the global financial system amid Trump’s sudden policy, whose administration claims to return manufacturing functions to America.
“The United States has long enjoyed a distinguished position, as the dollar was a global reserve currency and a treasury as backup assets. However, this situation is not guaranteed. If the global capital flows to American assets, it may indicate a multi -frame world with the decrease in dependence on the individual reserve currency.“
As investors start doubting the long -term direction of American exceptional, Pimco warns that the door is now open to investors to move their capital away from the US dollar and the bond treasury issued by Europe, Japan and emerging economies.
Earlier this month, Trump signed an executive order imposing a 10 % tariff on all imported goods entering the United States, and the declared goal of protecting local manufacturing. The President also issued a declaration that slapped mutual definitions to dozens of countries.
The move sparked a sharp decrease in the US dollar index (DXY), which measures the power of the dollar against a basket of other major foreign currencies likely by size.
DXY has decreased up to 6 % this month, from April’s opening from 104.18 to less than 97.92. The last time DXY slipped by about 6 % in May 2009, when the US economy collapsed due to the 2008 financial crisis.
DXY has since wore and has been traded in 99.58 as of the closure of Friday.
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