2025 has been pretty brutal for the US dollar. The fact that the USD had to go through multiple ups and downs this year triggered multiple outlets to forecast de-dollarization as the final result out of the current scenario. However, as brutal as US dollar fluctuations might be, experts believe it’s safe to add that the US dollar may show contrasting stances, but the idea of de-dollarization might be a little far-fetched to consider on broader terms.
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The Ebb and Flow in the US Dollar Value
Per Investopedia, the US dollar is considerably showing signs of violent fluctuations, undergoing price falls and plunges, due to the Fed’s interest rate cut stance. The Federal Reserve’s decision to cut interest rates has been impacting the US dollar in a way that makes USD appear non-lucrative in the eyes of the investors. Moreover, the Trump administration’s decision to favor a lower US dollar is another key development that made a severe impact on the US dollar’s positioning.
In a recent note issued by Wells Fargo’s chief economist, Tom Porcelli, the US dollar may become lucrative again once the Federal Reserve stance changes to support economic growth.
“We expect the greenback to broadly strengthen in the back half of next year as the Fed ends its easing cycle and de-dollarization talk diminishes,” he wrote. ”
US Dollar Still Relevant
The portal later talks about the US dollar being relevant till today, quelling the talks of de-dollarization in its entirety.
“The structural foundation of dollar dominance remains intact, supported by deep and liquid markets, the global reach of U.S. financial institutions, and an unmatched supply of safe assets,” Marcello Estevão, chief economist at the Institute of International Finance, wrote in a research note.
Also Read: Gold-Backed BRICS UNIT Advances as US Dollar Dominance Weakens
