A New Threat Looms Over the Dollar

For decades, the US dollar has been considered the main safe asset in the world. However, as Bloomberg reports, Donald Trump's unstable policies during his presidency and the trade war he unleashed with other countries undermined confidence in the dollar. As a result, investors began to prefer the euro.

The agency notes that the strengthening of yields on American bonds and the simultaneous decline in the dollar exchange rate prompted market participants to transfer capital to the European currency.

According to analysts, if current trends continue, the euro exchange rate could reach 1.2 dollars - this would be the highest level since mid-2021. However, most baseline scenarios do not yet assume such a sharp increase.