UBS Expects US Dollar Dominance to Persist for ‘Years to Come’

Swiss concern banking elephantine UBS expects the U.S. dollar’s reign to unrecorded on. “We firmly judge we volition beryllium surviving successful a U.S. dollar-centric satellite for years to come,” the bank’s enforcement said, adding that determination volition beryllium immoderate country for competitors.

UBS connected US Dollar’s Dominance

Switzerland-headquartered concern slope UBS has argued that the U.S. dollar volition clasp its dominance for years to come. Alejo Czerwonko, Managing Director and Chief Investment Officer Emerging Markets Americas astatine UBS Global Wealth Management, said connected Monday that contempt the caller Fitch Ratings’ downgrade:

We firmly judge we volition beryllium surviving successful a U.S. dollar-centric satellite for years to come.

He provided 3 reasons to enactment his argument. Firstly, “global currency regimes are sticky,” the UBS main concern serviceman stated. Noting that the U.S. dollar dominates fiscal markets and planetary trade, helium explained: “Changes successful the world’s ascendant currency person historically taken a agelong clip to materialize. Even arsenic large economical powers emergence and fall, their currencies’ reserve presumption tends to past good past the highest of their influence.”

The 2nd origin Czerwonko cited was liquidity, which “ranks astatine the precise apical of the properties that planetary reserve managers and those progressive successful planetary commercialized look for successful a currency,” helium said. The UBS managing manager stressed that the USD “remains the world’s ascendant currency successful this realm.”

The 3rd crushed helium provided concerns “stability” and “safety.” Czerwonko detailed: “For each the challenges the U.S. fiscal and governmental strategy is experiencing, the state inactive ranks highly successful assorted gauges including regularisation of law, regulatory prime and efficiency, and marketplace openness (the prevalence of superior controls, for example).”

The UBS enforcement concluded:

All successful all, we deliberation the dollar’s reign volition unrecorded on. At the aforesaid time, it volition apt marque immoderate country for competitors on the way.

“Rising geopolitical tensions could trigger quicker adjustments successful the planetary currency order. Yet, determination doesn’t look to beryllium a sole currency that stands to benefit,” Czerwonko noted.

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