Federal Reserve Building, Washington,DC
Author: Charlotte Gifford
September 8, 2020
In July 2020, the US dollar suffered its poorest monthly performance for a decade, as the country grappled with the economic fallout of the pandemic. The currency’s tumble has raised concerns that its dominance of the global financial system could be waning. According to data from the Commodity Futures Trading Commission, hedge fund bets against the dollar in futures markets are at their highest level in about ten years. Meanwhile, Goldman Sachs currency strategists have warned that the dollar is in danger of losing its status as the world’s reserve currency.
Many economists think that concerns about the dollar’s demise are over-exaggerated. They argue that a number of short-term factors have contributed to its decline, including the US Federal Reserve’s aggressive monetary easing, aimed at boosting liquidity during the pandemic.
Others disagree that a weaker dollar means it’s necessarily losing