I spoke with BNNBloomberg yesterday about the weakness in the US dollar so far this year and what's driving it.

I highlighted six main points that I also wrote about yesterday.

  1. Tariff troubles sparking supply chain fears beyond simple inflation math, with markets nervous about potential cascading disruptions similar to COVID experience
  2. Growth agenda taking backseat to protectionism as tax cut extensions offer limited upside while policy uncertainty creates business headwinds
  3. Deficit spending alarming bond markets with 7% GDP gap during full employment; Congress pushing toward potential 10% deficit with promised spending package
  4. Institutional foundations of USD dominance (NATO, WTO, rule of law) eroding at pace that threatens reserve currency status; IP rights now potential vulnerability
  5. Immigration crackdown threatening key labor forces in inflation-controlling sectors like agriculture and hospitality; no coherent policy emerging despite recent rhetoric
  6. Fed independence potentially at risk after court allows agency firings, creating tail risk that could undermine fundamental dollar credibility if Supreme Court upholds
US dollar cracking sculpture
Source: Forex Live