22/7/2025–|Last update: 06:21 (Mecca time)
The Economist newspaper reported in a recent report that the US dollar has been going through an unprecedented stage for years, driven by a series of policies and positions taken by the president. Donald Trump Since his return to White House.
Although Financial markets The American showed a noticeable ability to adapt to the fluctuations of this stage, as the indicators of financial depth indicates that the situation of the American currency as a safe haven is no longer guaranteed as before.
Economic shocks have been repeated since Trump’s inauguration, to the extent that investors have become respondents.
The newspaper notes that decisions would have caused panic in the markets – such as the imposition of customs duties by 50% on copper and 30% on the imports of the European Union – no longer only met with a relative state.
However, limited exceptions occurred, most notably on July 16 when Trump waved the possibility of dismissing the Federal Reserve President Jerome PowellThis caused an instant unrest in the high revenues of bonds and the decline in the dollar, before the markets returned to normal, but the American indicators recorded new historical levels the next day.
But this “apparent stability”, as the Economist describes it, does not hide the escalating anxiety of investors.
The newspaper notes that the dollar fell by approximately 10% against a basket of developed countries since the day of the inauguration of Trump, in a completely opposite direction for the expectations of the Treasury Secretary Scott Bessent Who had been likely to perform policies Protection To enhance the value of the dollar, by reducing the demand for foreign currencies to finance imports.
The interest does not save the dollar
The Economist indicates that one of the main interpretations of this decline lies in the disintegration of the traditional relationship between interest rates and the value of the currency.
During the month of April, this relationship collapsed temporarily, as revenue increased Bonds The American is a decrease in the dollar exchange rate, in an unusual phenomenon in the economies of developed countries, but it is familiar in the emerging markets.
The newspaper considered that this style is reminded of the British bond crisis that occurred during the 2022 Liz Terrace.
Although the relationship between interest rate The dollar returned to its normal position later, because the American currency did not recover the value it lost, and this reflects – according to the Economist – continuous damage to the global dollar status.
The newspaper explains that the evaluation of the dollar path is not limited to interest alone, but is also affected by structural factors such as relative economic growth and confidence in American financial policy, which are factors that have become suspicious in light of Trump’s sudden decisions.
Employment of “safe haven” adjective
The newspaper confirms that one of the pillars of the dollar power has always been represented in its position as a safe haven in times of global financial crises, where investors resort to American assets when the risks are increasing.
But this base was subjected to clear vibration in April, when the Fox Index (Fix), which is one of the scales of fear in the markets, increased at the same time that the dollar fell, which represents a coup in the market behavior towards the American currency.
In this context, the Economist newspaper quotes Stephen Kamin, a researcher at the American Enterprise Institute, presented it for the idea of using the relationship between the “Fix” index and the price of the dollar (after controlling other variables such as interest) as an indicator of “the fragility of the dollar”.
According to this indicator, the American currency has increased after Trump described it as “liberation day” – his inauguration day – and then worsened during the following weeks, before it settled relatively over the past month.
Dollar steps test
The Economist indicates that the damage to the US dollar is still in place, but it has not aggravated in recent weeks. However, the risk of a new crisis remains existing, especially if Trump carries out his new customs threats to be applied on August 1, which may restore American fees to the high levels that caused panic in April.
The newspaper adds that the independence of the Federal Reserve (the US Central) is still threatened by the increasing political pressure from the White House, which increases the markets’ concern about the stability of American monetary policies.
The Economist believes that the markets are dealing with the “daily tampering in the White House” familiar Crings, but at the same time it realizes that any larger slide may cause a new storm in currency and bond markets.
At the end of its report, the newspaper stresses that “the US dollar has not yet fallen, but it received clear strikes at the heart of its image as an unbearable currency.”
She concluded: “In light of the disturbances that were distinguished in 2025, it is not likely that the dollar observers will wait long before they have a new opportunity to test the extent of the steadfastness of the American currency.”