Latest news with #ChristopherVecchio
Yahoo
9 hours ago
- Business
- Yahoo
Debunking the Myth: Is the U.S. Dollar About to Collapse?
The U.S. dollar has been the world's primary reserve currency since the end of World War II. Despite viral stories proclaiming that countries in the BRICS bloc (Brazil, Russia, India, China and South Africa) are ditching the dollar, experts aren't too concerned — at least not in the near term. In fact, talk of a world without the U.S. dollar is largely considered a hype-driven myth. Read More: Find Out: So, what makes the U.S. dollar unlikely to collapse anytime soon? Here's what the experts say. While it's unlikely that the U.S. dollar will implode overnight, there are reasons why so many people are concerned. 'Typically, currencies follow interest rate differentials — when bond yields go up, the local currency gets stronger. But in the case of the U.S. dollar, it's been behaving like an emerging market currency: higher bond yields, weaker equities, and a falling currency,' said Christopher Vecchio, global co-head of macro at Tastylive. 'So it's concerning, particularly in [the] context of this relationship unfolding with the Trump tariffs.' Some sources indicate that President Trump could be undermining the U.S. dollar's position as the global reserve currency. In particular, talk about imposing steep tariffs on the country's international trading partners has had a notable impact on the U.S. and global stock markets. Depending on how things play out, there could be a threat to the dollar's current status. Discover Next: Other experts agree that the U.S. dollar is unlikely to be on the verge of collapse. Much of this is due to its resilience in the world financial system. 'It serves as the world's primary reserve currency, is central to international trade, and is widely held by central banks around the world,' said Joshua Charles, CEO and founder at Frontier Dominion. 'This foundational role provides the dollar with considerable stability, even when domestic fiscal policy is under strain. Many other currencies lack the same level of trust due to issues like limited export diversity, underdeveloped capital markets, or inconsistent fiscal management.' Charles noted that social media, alternative investment advocates, and financial influencers have largely added to the myth that the dollar is about to collapse. It's still important to keep aware of the current issues, like political gridlock and mounting U.S. debt, though. The U.S. dollar could weaken over time, but the idea that it's at the end of its line is still largely based on hype. Right now, the majority of global commerce runs on the U.S. dollar. Last year, nearly half (48%) of all global payments on SWIFT were made in USD. That's up from the 45% it was 10 years ago. 'But here's the rub: the reason why so many other countries use U.S. dollars is because they need to recycle them from America's trade with each country. Trade deficits for the U.S. are surpluses elsewhere, and those surpluses are recycled into USD-denominated assets,' said Vecchio. Things could change, but not right now. 'One can surmise that if the U.S. is reordering the global trade system to, well, trade less with the rest of the world, then the U.S. dollar may no longer be as desirable in time — but that would be a long way off in the future,' said Vecchio. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 10 Cars That Outlast the Average Vehicle Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on Debunking the Myth: Is the U.S. Dollar About to Collapse? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 hours ago
- Business
- Yahoo
Debunking the Myth: Is the U.S. Dollar About to Collapse?
The U.S. dollar has been the world's primary reserve currency since the end of World War II. Despite viral stories proclaiming that countries in the BRICS bloc (Brazil, Russia, India, China and South Africa) are ditching the dollar, experts aren't too concerned — at least not in the near term. In fact, talk of a world without the U.S. dollar is largely considered a hype-driven myth. Read More: Find Out: So, what makes the U.S. dollar unlikely to collapse anytime soon? Here's what the experts say. While it's unlikely that the U.S. dollar will implode overnight, there are reasons why so many people are concerned. 'Typically, currencies follow interest rate differentials — when bond yields go up, the local currency gets stronger. But in the case of the U.S. dollar, it's been behaving like an emerging market currency: higher bond yields, weaker equities, and a falling currency,' said Christopher Vecchio, global co-head of macro at Tastylive. 'So it's concerning, particularly in [the] context of this relationship unfolding with the Trump tariffs.' Some sources indicate that President Trump could be undermining the U.S. dollar's position as the global reserve currency. In particular, talk about imposing steep tariffs on the country's international trading partners has had a notable impact on the U.S. and global stock markets. Depending on how things play out, there could be a threat to the dollar's current status. Discover Next: Other experts agree that the U.S. dollar is unlikely to be on the verge of collapse. Much of this is due to its resilience in the world financial system. 'It serves as the world's primary reserve currency, is central to international trade, and is widely held by central banks around the world,' said Joshua Charles, CEO and founder at Frontier Dominion. 'This foundational role provides the dollar with considerable stability, even when domestic fiscal policy is under strain. Many other currencies lack the same level of trust due to issues like limited export diversity, underdeveloped capital markets, or inconsistent fiscal management.' Charles noted that social media, alternative investment advocates, and financial influencers have largely added to the myth that the dollar is about to collapse. It's still important to keep aware of the current issues, like political gridlock and mounting U.S. debt, though. The U.S. dollar could weaken over time, but the idea that it's at the end of its line is still largely based on hype. Right now, the majority of global commerce runs on the U.S. dollar. Last year, nearly half (48%) of all global payments on SWIFT were made in USD. That's up from the 45% it was 10 years ago. 'But here's the rub: the reason why so many other countries use U.S. dollars is because they need to recycle them from America's trade with each country. Trade deficits for the U.S. are surpluses elsewhere, and those surpluses are recycled into USD-denominated assets,' said Vecchio. Things could change, but not right now. 'One can surmise that if the U.S. is reordering the global trade system to, well, trade less with the rest of the world, then the U.S. dollar may no longer be as desirable in time — but that would be a long way off in the future,' said Vecchio. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 10 Cars That Outlast the Average Vehicle Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on Debunking the Myth: Is the U.S. Dollar About to Collapse?
