The weakening of the US dollar due to the Covid-19 pandemic, and the new policies proposed by the Federal Reserve, led to speculations that the US dollar is losing its dominance as a global currency.
However, there is ‘push back’ that these speculations are exaggerated because ‘there are no other contenders’ for a reserve currency.
Daniel Lacalle, an economist and author, tweeted on how the US dollar index lost 10% since March and the speculations surrounding its collapse as a reserve currency.
He noted that these speculations are false and that the US dollar index has weakened only relative to the Euro and the Yen.
Lacalle added that the status of the US dollar as a reserve currency is not at risk as there is no other contender.