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This slump in the dollar’s strength could align with a broader strategy by the Trump administration to devalue the currency. Such a plan, associated with Stephen Miran, Chairman of the US Council of Economic Advisers, remains speculative as Miran has previously denied any conspiracy. However, the notion underscores the administration's goal to make US exports more competitive and potentially reduce the trade deficit.
While these developments could theoretically benefit American exporters, the looming uncertainty due to ongoing negotiations with key international partners complicates the landscape, with an important deadline approaching on July 9. Investors are apprehensive, as Trump's rigorous tariffs could elevate inflation and interest rates, impacting global financial ties to the US dollar.
Despite White House assurances of confidence in the US economy, highlighted by rallies in ten-year Treasury yields and significant investment influxes, analysts warn of underlying risks. Stephen Miller, a consultant for GSFM, has voiced concerns about the potential volatility brought on by these policies.
Rick Rieder of BlackRock suggests that full-scale de-dollarisation is not imminent, yet the erosion of confidence in the dollar—typically a safe haven asset—could be aggravated by escalating US government debt. The national debt is set to rise by an additional $3 trillion due to Trump's budget bill, which narrowly passed the Senate and awaits House approval.
As inflationary pressures and fiscal deficits mount, the yield on ten-year Treasuries has experienced a downturn from nearly 5% earlier this year to 4.267%, suggesting continued stress on financial markets. Ben Emons of FedWatch Advisors predicts ongoing pressure on the lower end of the yield curve, which could further weaken the dollar if Treasury yields face increasing pressure.
Published:Thursday, 3rd Jul 2025
Source: Paige Estritori
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Investors Advised Against Overvalued Markets Amid Economic Uncertainty 18 Jul 2025: Paige Estritori In a market swayed by trade tensions and geopolitical uncertainties, investors are encouraged to remain cautious of inflated valuations. The mid-year outlook from Schroders warns against ignoring these issues, despite the market's surprising resilience to economic pressures. - read more |
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ASIC Penalises Two Licensees for Unregistered Financial Advice 17 Jul 2025: Paige Estritori The Australian Securities and Investments Commission (ASIC) has taken enforcement action against two financial planning licensees for permitting unregistered advisers to provide personal financial advice. This regulatory action involved Sky Money Pty Ltd and Smart Financial Capital Pty Ltd, who were each required to pay infringement notice penalties amounting to $31,300 in early July 2025. - read more |
