Finance
Deutsche Bank says risk of a dollar confidence crisis
Published by Global Banking & Finance Review®
Posted on April 3, 2025
1 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 3, 2025
1 min readLast updated: January 24, 2026
Deutsche Bank warns of a potential crisis in U.S. dollar confidence, driven by capital flow shifts and disorderly FX moves, impacting global markets.
LONDON (Reuters) - Deutsche Bank warned on Thursday of the risk of a crisis of confidence in the U.S. dollar, saying major shifts in capital flow allocations could take over from currency fundamentals and currency moves become disorderly.
The dollar, the world's No.1 reserve currency, came under broad-based selling pressure on Thursday as U.S. President Donald Trump's latest tariff salvo raised concerns about U.S. recession risks.
"Our overall message is that there is a risk that major shifts in capital flow allocations take over from currency fundamentals and that FX moves become disorderly," Deutsche Bank's George Saravelos said in note.
He added an acceleration in the dollar's decline would be unwelcome for global central banks.
"The last thing the ECB wants is an externally imposed disinflationary shock from a loss in dollar confidence and a sharp appreciation in the euro on top of tariffs," he said, referring to the European Central Bank.
"Expect pushback. We are in the midst of dramatic regime change in markets."
The dollar was last down over 1.5% against the euro and yen and more than 1% against sterling.
(Reporting by Dhara Ranasinghe, editing by Alun John)
The article discusses Deutsche Bank's warning about a potential crisis of confidence in the U.S. dollar.
The dollar faces pressure due to U.S. recession concerns and shifts in capital flow allocations.
A decline in dollar confidence could lead to disorderly FX moves and impact global central banks.
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