JPMorgan fears for US dollar’s dominance

Chief among the factors that could threaten the dollar’s long-term dominance is political dysfunction in the United States that could block efforts to manage the national debt, the strategists wrote in a report. — Bloomberg

NEW YORK: Investors betting on the US dollar’s continued dominance in the years to come are overlooking the risks of rising political instability in the United States and escalating tensions with China.

That’s the thinking of JPMorgan strategists who argue that the markets aren’t fully reflecting the risk of a “rapid and deep” decline in the greenback’s status as the currency of choice for global reserves and trade – a process known as dedollarisation. It’s also left the dollar expensive on a historical basis.