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Corona crisis threatens dollar’s dominance
04-06-2020 21:01
Corona crisis threatens dollar’s dominance
Corona crisis threatens dollar’s dominance

The raging COVID-19 pandemic not only challenges the ability of countries to contain the virus but also tests the international financial system and its dominant currency - the US dollar. As for the United States, it seems that the virus outbreak has only strengthened the “America First” stance supported by Donald Trump. The US is no longer willing to help the rest of the world. Trump’s administration has already made it clear that it would act alone and solely in the “national interest” when it comes to foreign policy. This reasonable statement has sparked a wave of criticism of the US dollar dominance. Benjamin Cohen, professor of International Political Economy at the University of California, questions the leading role of the American currency. “The longer America puts two faces forward, the likelier it will be to fall from its long-held position atop the international monetary and financial system. After all, how much longer will international investors and foreign governments trust the money of an increasingly unreliable partner?” he stresses. On the other hand, there is little risk of a massive escape from the dollar. What is more, judging by the situation on stock exchanges, the COVID-19 crisis has once again reaffirmed the dollar’s status of the main safe-haven asset.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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