Greenback — a safe haven no more?

AFTER suffering its steepest first-half-year decline in 50 years, the US dollar managed to recover a touch in July — but not before its repute as a global safe-haven currency had taken a significant hit. Despite a slight improvement in the US dollar index, the markets continue to discount an early recovery of the greenback. The dollar index had initially dropped 10.8 per cent against a basket of major global currencies during the period between January and July — its lowest since 1973, when President Richard Nixon detached the dollar’s value from gold. This time around analysts have linked the slump to President Donald Trump’s “chaotic” economic policies — tariff wars, swelling fiscal deficits and debt growth, and interference in Federal Reserve policy to force it to lower the interest rates — that have prompted global investors to sell their greenback holdings.