US Dollar: Safe haven status faces debt-market strains – Rabobank
Rabobank’s Senior FX Strategist Jane Foley discusses how rising global bond yields and mounting concerns over United States (US) fiscal discipline are challenging the traditional safe haven role of US Treasuries and the US Dollar (USD).
The US Dollar's safe haven status is facing challenges due to strains in debt markets, according to Rabobank's Senior FX Strategist Jane Foley. Global bond yields are rising, with the US 30 year Treasury bond leading the surge to multi-year highs. This increase in yields, coupled with concerns over the United States' fiscal discipline and changes in Treasury ownership, could test the traditional safe haven role of US Treasuries and the US Dollar.
Traditionally, in times of uncertainty, both treasuries and the USD gain value. However, if the pressure on global bonds persists, it could weaken the USD's safe haven status, particularly if the Treasury market becomes less protected. Additionally, de-dollarisation may gradually erode the USD's dominance in the coming decades, further impacting its status.
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