Dollar's Safe Haven Status Under Siege Amidst Tariff Tensions

The U.S. dollar, once viewed as a safe haven, is losing credibility amid trade tensions spurred by President Trump's tariff policies. Investors are concerned as the dollar reaches lows against the Swiss franc and euro. With global markets in turmoil, the U.S. faces higher borrowing costs and diminished financial safety.

The global standing of the U.S. dollar as a reliable safe haven is facing unprecedented challenges as President Donald Trump's erratic tariff strategies unsettle traditional allies and adversaries alike. This unexpected shift has raised alarm bells across the financial world, shaking investors' confidence in the once-dominant currency.

Evidence of this loss of faith is stark, particularly in the U.S. Treasury market, which experienced its largest weekly spike in borrowing costs since 1982. The dollar is on track for its worst performance since 2017, plunging to a decade low against the Swiss franc and a three-year low against the euro.

Experts argue the U.S. risks losing its safe-haven image, impacting its ability to attract foreign capital. Despite some optimism about a potential recovery, the implications of a diminished dollar are significant, potentially leading to prolonged high interest rates and affecting bonds and equities globally.

(With inputs from agencies.)