The former US dollar, an unwavering fortress in the global market, faces a cloudy horizon.
A recent Bank of America survey held from April 4th to 10th reveals that The world’s largest investment fund expects sustained depreciation of US currency In the next 12 months.
This pessimism, promoted by the tariff policy of the Donald Trump administration, is Investors take to rethink their exposure to dollar-linked instrumentslike financial debt, it can face considerable capital production.
In this context of turbulence, Alternative assets such as gold and Bitcoin (BTC) appear as potential sheltersattracts the attention of those trying to protect themselves from devaluation of Fia currency.
Fund Managers Foresee the Dollar Weakness
Bank of America’s latest global fund manager has interviewed 164 managers over $3860 million, reflecting their pessimistic mood.
It was created in April, the month the White House established a new tariff ad, This study shows a dramatic decline in optimism.
Global growth expectations, behavioral behavior, broader measures of managers’ emotions assessing cash balances; It collapsed from March 8th to January 8th in April, the lowest level since October 2023.as seen in the following graph.
This pessimism stems primarily from Donald Trump’s economic measures. Donald Trump includes a 245% tariff on Chinese imports and a promise to delay tariffs to 70 countries in just 90 days.
These policies have intensified the commercial war with China and erode trust in the dollar as a safe haven. 61% of respondents expect the dollar to depreciate next year, US financial entities said.
DXY index that measures the value of dollars against a basket of fíat currency, Last week, at a minimum of 98 points in three years..
In response, investors are adjusting their portfolios. Foreigners sold $22,000 million in American stake in April, following a record of 410 million in March, the largest in a year, according to Kobeissi’s letter The Financial Bulletin.
The main vendors were European investors. They still have $16 billion in US stocks, but it is equivalent to 23% of the total market value. “As money leaves the US, the euro will be strengthened against the dollar,” Kobaisi’s letter explains.
EUR/USD torque has been on an upward trend since the beginning of March, indicating that more dollars are needed to buy the euro, reflecting the relative devaluation of the dollar.
This dynamic has a deep meaning. The euro’s strength against the dollar could change the flow of European commercial and investment in Europe and strengthen the European currency’s position in global markets. In addition, Increased global reserve gold holdings reflects a search for stability in a vast monetary policy environment. Meanwhile, Bitcoin has gained traction among institutional investors as a digital evacuation asset.
Commercial Wars and Political Turbulence
The commercial war between the US and China, coupled with the political uncertainty that JP Morgan describes as “unprecedented” , mines trust in US assets.
The market registers the simultaneous sales of stocks, bonds and dollars, which are rare phenomena. “Investors demand a greater risk premium to stay active in the dollar,” JP Morgan says. What undermines the traditional position of the dollar as a solid shelter.
According to Kobeissi’s letter, foreign treasure bond holdings have fallen to 23% of US government debt, the lowest level in 22 years.
It will decline Over the past nine years, 11% points reflects trends in global reserve diversification.
In contrast, gold was the highest percentage in 26 years, earning ground, accounting for 18% of international reserve, an increase of 8% points since 2015. This global wallet reconstruction suggests structural changes in perception of dollar-related risksBulletin analysts point out.
Meanwhile, Trump’s tariff policy creates debate. Mark Benbow of Aegon High Hight Co -Manager said, “Want the US to manufacture their own products? Yes.
The 37% tariff on the export of Botuana Diamonds shows a contradiction. “You don’t have to be an expert to notice these strangeness,” says Benbow. The administration plans to negotiate tariffs with countries such as the UK and Japan. China seems cumbersome and raises risk premiums in the US market.
Gold and Bitcoin: Storm Shelter
In this context of volatility, Gold and Bitcoin are attracting investors’ attention. Gold reached $3,500 per ounce last week, marking a new historic maximum for prices.
Bitcoin, For that part, it has now exceeded $95,000 since the start of March after maintaining a stable state of around $86,000.last week. Both assets are driven by their perceptions as shelter for macroeconomic uncertainties and are increasingly correlated.
Gold, historically valued for its rarity and global liquidity, has become a central bank pillar. but, Bitcoin offers unique benefits in the digital age. With a mathematically guaranteed fixed supply of 21 million coins, that shortage is absolute. The Bitcoin Network can quickly verify the reliability of each unit and provides global liquidity with rapid transfers, regardless of volume or distance, as shown in recent cryptographic publications.
In this sense, Bitcoin is the antidote to Fear’s money devaluation. Emphasizing the ability to maintain value in a vast monetary policy environment.
Furthermore, Bitcoin’s resistance to censorship and confiscation makes it attractive in crisis scenarios. In the past, the government has resorted to forfeiture to correct the state’s deficit. This is the risk of Bitcoin Michiga.
These properties place Bitcoin as a great asset, combining the virtue of gold with the flexibility of the Bitcoin network. His ability to operate outside the traditional financial system makes it an attractive optionespecially in emerging markets where there is a high degree of distrust in Fear currency.
Investment funds paying attention to these signals diversify towards assets such as the euro, Japanese yen, gold, and Bitcoin. In the case of JP Morgan, the volatility of US assets is amazing and marked large sales. “Investors are reconsidering their high exposure to US assets,” the bank warns, suggesting adjustments to portfolio and currency allocations.
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