The U.S. dollar may soon lose its safe-haven status as global markets adjust to a rapidly changing geopolitical landscape, according to Deutsche Bank. George Saravelos, the bank’s global head of FX strategy, stated, “The speed and scale of global shifts is so rapid that this needs to be acknowledged as a possibility.” This warning follows a 0.7% drop in the dollar on Tuesday, surprising investors who expected it to strengthen amid new tariffs. Saravelos noted a declining correlation between the dollar and risk assets, along with a rising current account deficit, which often indicates limits to dollar overvaluation. He also mentioned that the EU’s increased defense spending, in response to President Trump’s withdrawal of security support, is contributing to this shift. “We are starting to become more open-minded to the prospects of a broader weaker trend unfolding for the dollar,” he concluded, highlighting challenges to America’s role in global security and trade.
Deutsche Bank Warns US Dollar May Lose Safe-Haven Status Amid Rapid Geopolitical Shifts
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