US dollar’s global dominance shaken by Trump’s policies, deVere’s Green warns By Investing.com

Investing.com -- The Foreign exchange dealers with low spreadsglobal dominance of the US dollar as a safe-haven currency is being threatened due to President Trump’s unpredictable policy decisions, warns deVere Group CEO, Nigel Green. Trump’s actions, including tariffs, geopolitical conflicts, aggressive deportations, and radical interventions with Musk’s Department of Government Efficiency, are prompting a worldwide shift away from the dollar.

The CEO notes that the dollar, which has been a cornerstone of global finance, is seeing a loss of confidence due to Trump’s policies. The US’s inward turn, characterized by protectionism, trade wars, and unpredictable diplomacy, is causing the dollar to lose its strength. Despite Trump’s assertions that tariffs would strengthen America, the dollar has instead fallen to a four-month low.

In response, the world is seeking to protect itself. Major economies are developing plans to settle trade in alternative currencies. China and Russia are increasing their use of the yuan and rouble for cross-border payments, and the euro is gaining popularity for reserves.

Green suggests that the rapid pace of de-dollarization, previously thought to be inconceivable, is a response to the chaos caused by Trump’s policies. His foreign policy is creating tension with allies and pushing them to seek alternatives. Recent disagreements with Ukraine’s Volodymyr Zelenskyy and threats to cut US military aid have caused concern in European capitals, with France and the UK considering greater military and economic independence from the US.

The dollar, traditionally the bond holding alliances together, could become a liability for those fearing they may be caught in Trump’s crossfire. Green states, "Confidence drives currency strength. Trump is making long-standing allies think twice, igniting trade wars, and creating massive instability. That’s the opposite of what you need to maintain a reserve currency.”

Trump’s drastic actions with Elon Musk’s Department of Government Efficiency (DOGE) are adding to the uncertainty. Investors are questioning whether the US economy is being guided by a sound financial strategy or by impulsive political decisions.

The financial implications for the US could be severe. A weaker dollar leads to higher borrowing costs, inflationary pressures, and a loss of influence over global financial markets. The debt burden, already on the rise, will become even more costly to service as foreign investors retreat from US treasuries.

The Bank of England, among other key global institutions, is warning of increasing risks related to US trade policy. Investors are moving capital into other major currencies, including the euro, Swiss franc, and yen. Gold is seeing a resurgence in demand as investors seek protection from currency volatility. Even digital assets, traditionally viewed as speculative, are increasingly being considered as hedges against fiat instability.

deVere Group advises investors to act before the full effects unfold. Diversifying away from dollar-heavy portfolios, strategically positioning in rising currencies, and gaining exposure to assets, geographies and sectors that benefit from a shifting financial order are now essential.

Green concludes, “Investors and institutions are already adjusting. The dollar’s status as a safe haven asset and reserve currency won’t disappear overnight, clearly, but Trump’s actions are lighting the fuse.”

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