The Rise and Potential Fall of the US Dollar

Donald Trump's victory in the November United States presidential election initially saw the US dollar strengthen, reaching a one-year high within two weeks. However, his 'America First' policies and threats of tariffs on imports from emerging markets like the BRICS group could potentially disrupt global trade and hasten the end of the US dollar's dominance.

The US dollar has been the world's 'dominant currency' since World War II, used in over 50% of foreign trade invoices and over 80% of all foreign exchange transactions worldwide. Its role as a reserve and vehicle currency enhances global trade efficiency, as seen in transactions between countries like Chile and Malaysia.

Yet, Trump's policies, including potential tariffs on the BRICS group should they create a rival to the US dollar, could shift global economic dynamics. This shift could undermine the US dollar's central role in international trade and finance, marking the beginning of the end for its global dominance.