Is the US dollar stuck in a crisis?

Article by Simon Landt

The US dollar is experiencing its most dramatic slump in years – with far-reaching consequences for international investors. Since the beginning of the year, the greenback has lost over 11 percent against the euro, turning even successful US equity investments into loss-making ventures for European investors.

While the S&P 500 has risen by 7.2 percent in dollar terms, euro investors have had to contend with a loss of 5.2 percent. But is this merely a temporary correction, or the beginning of a new era?

We analyse the emotional factors behind the dollar crash and explain why fundamental indicators suggest a completely different development. At the same time, we shed light on long-term trends: central banks around the world are turning away from the dollar, increasingly relying on gold and alternative currencies, while technological innovations such as central bank digital currencies challenge the traditional dominance of the greenback.

Is the era of the US dollar as the world’s leading currency coming to an end?