Dollar dominance under threat from Trump

The US dollar’s dominance as the world’s ulitmate safe-haven currency is being “shaken and severely tested,” warns the CEO of global financial advisory giant, deVere Group.

Nigel Green says that President Trump’s erratic policy decisions—tariffs, geopolitical clashes, aggressive deportations, and radical interventions with Musk’s Department of Government Efficiency—are accelerating the global shift away from the dollar. Investors are scrambling for alternatives, and the consequences could become permanent.

“The dollar has long been the anchor of global finance, but Trump’s actions are eroding confidence at a stunning pace. The world is watching the US turn inward with protectionism, trade wars, and erratic diplomacy.

“The market response is already in motion. The dollar has slumped to a four-month low, despite Trump’s rhetoric that tariffs would ‘make America stronger.’

“Instead, the world is moving to insulate itself.

“Major economies are advancing plans to settle trade in alternative currencies. China and Russia are expanding the use of the yuan and rouble in cross-border payments. The euro is gaining traction for reserves.

“The once-unthinkable de-dollarization seems to be happening at an accelerated pace, and Trump is handing the world every reason to continue.”

This isn’t just about economic shifts—it’s a reaction to chaos.

Trump’s foreign policy is alienating allies and pushing them to seek alternatives. His recent spat with Ukraine’s Volodymyr Zelenskyy, coupled with threats to cut US military aid, has sent shockwaves through European capitals. France and the UK are already exploring greater military and economic independence from the US.

The dollar, long seen as the glue binding alliances, could now become a liability for those who fear being caught in Trump’s crossfire.

“Confidence drives currency strength,” says Nigel Green. “Trump is making long-standing allies think twice, igniting trade wars, and creating massive instability. That’s the opposite of what you need to maintain a reserve currency.”

His drastic actions with Elon Musk’s Department of Government Efficiency (DOGE) are further adding to uncertainty.

“Investors are questioning whether the US economy is being driven by sound financial strategy or by impulsive political decisions.

“Meanwhile, his approach to tariffs—doubling down on trade wars with China and now extending them to allies like Canada and Mexico—is accelerating a realignment of global trade away from dollar-based transactions.”

The financial consequences for the US could be severe. A weaker dollar means higher borrowing costs, inflationary pressures, and a loss of influence over global financial markets. The debt burden, already ballooning, will become even more expensive to service as foreign investors pull back from US treasuries.

Trump’s policies are setting the stage for a self-inflicted economic downturn, one that will have far-reaching consequences beyond his time in office.

The cracks are already visible, with The Bank of England, among other pivotal global institutions, warning of growing risks tied to US trade policy.

Global investors are taking action. Capital is shifting into other major currencies, with the euro, Swiss franc, and yen gaining ground. Gold is seeing renewed demand, as investors seek protection from currency volatility. Even digital assets long viewed as speculative, are increasingly being considered as hedges against fiat instability.”

deVere Group advises investors to act before the full effects unfold. Diversifying away from dollar-heavy portfolios, strategically positioning in rising currencies, and gaining exposure to assets, geographies and sectors that benefit from a shifting financial order are now critical.

Nigel Green concludes: “Investors and institutions are already adjusting. The dollar’s status as a safe haven asset and reserve currency won’t disappear overnight, clearly, but Trump’s actions are lighting the fuse.”