After U.S. President Donald Trump imposed the steepest tariffs in more than a century, a debate began to rage over the world’s most prominent currency. Is the U.S. dollar still a safe haven or starting to look more like one of the emerging markets’ Fragile Five — vulnerable to fast sentiment shifts and hot portfolio flows?
There’s no clear verdict, yet. Last week, the greenback tumbled after the White House announced punitive levies on its biggest trading partners. But as the stock slide deepened and financial distress mounted, risk-averse investors bid up the dollar again.
An unease lingers on, however. If Trump is determined to use high tariff walls to turn the U.S. into a self-sufficient economy, will other nations still need to hold onto so many dollars?
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