Deep Dive: US dollar dominance remains despite 'loss of trust'

Currency risk a ‘zero-sum game’

James Baxter-Derrington
clock • 5 min read

The US dollar is unlikely to lose its status as the world’s reserve currency, despite the rise of de-dollarisation as trust in the greenback erodes.

The currency's share of global foreign exchange reserves has been on a gentle downwards trajectory since the millennium began, hitting its lowest level since 1995 during Q4 2020, according to data from the International Monetary Fund. In the first years of this century, the dollar comfortably accounted for north of 70% of global reserves, but this has since fallen shy of 60%, sitting at 59.02% during Q1 2023. Has the US dollar peaked? Speaking to Investment Week, Michael Kelly, global head of multi-asset at PineBridge Investments, explained that this decline was due to shifting fai...

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