Investopedia: Experts Warn Weakening Dollar Signals 'Crisis of Confidence' in Backbone of Global Markets
Article by Colin Laidley in Investopedia
The U.S. dollar is on track to have its worst month in years, a development that has alarmed some experts worried about crumbling faith in U.S. financial stability.
The U.S. Dollar Index has declined more than 4.3% since the start of the month. If the index held steady for the remainder of April, it would be the U.S. dollar’s worst month since November 2022 and its ninth-worst since 2000.
With March’s 3.2% decline, the dollar is on track to have its worst two-month stretch since 2002.
Are Investors Shunning Dollar-Based Assets?
The dollar’s decline has puzzled market watchers, including former Treasury Secretary Janet Yellen, who called the recent moves in the world's reserve currency part of “a very unusual pattern” during an interview with CNBC on Monday.
Yellen explained that investors tend to gravitate to safe havens like U.S. Treasury securities during times of market uncertainty. Increased demand for Treasurys, she said, usually boosts the dollar since Treasury bonds can only be traded in dollars. But recently ......