4 reasons the USD rally will falter (#4 is going to be very difficult to recover from)

Analysts at Macquarie say that even if Trump reverses all his tariffs the US dollar is unlikely to fully recover all of its recent losses.

They give three reasons :

• any capital flight from the U.S. isn’t just about foreign central banks, sovereign wealth funds, or public pension plans abroad selling their U.S. assets at the direction of foreign politicians

And add a fourth reason on why foreign holders need to diversify away from the dollar:

• the reduction in the integrity of some US institutions and systems

Once trust is blown, its very difficult to recover.

Macquarie conclude that the USD will become less a must hold currency and more an alternative to a few omparable choices, citing the euro as an example.

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