US Dollar Dominance Eroding as Expert Warns Stacked Macro Risks
Global currency markets are showing renewed strain as confidence in established monetary leadership weakens. Independent financial advisory organization Devere Group warned on Jan. 28, 2026, that the U.S. dollar’s dominance is fracturing as investors react to compounding macroeconomic and policy risks.
The warning follows an accelerating sell-off in the greenback after President Donald Trump publicly downplayed the currency’s recent sharp declines, intensifying unease across foreign exchange markets. The dollar slid 1.3% against a basket of major currencies, touching its lowest level in four years, while the euro and sterling climbed to their strongest levels since mid-2021 and the yen advanced toward ¥152 per dollar. Devere Group CEO Nigel Green stated:
“Currency markets are flashing red. The dollar sits at the centre of the global financial system, and moves of this scale signal a serious loss of confidence in America’s policy direction.”
“President Trump’s dismissal of the dollar’s fall alarms investors. FX markets trade credibility and discipline. When leaders and policymakers appear unconcerned about sharp declines, traders assume volatility will persist,” the executive added. Green also described the move as a deeper reassessment of U.S. macroeconomic exposure. “Aggressive fiscal expansion, unpredictable trade policy, and sudden political interventions create uncertainty over growth, inflation, and capital flows. Currencies price risk immediately, and, as we’re seeing in real-time, the dollar is paying the price.”
Attention is now shifting toward where capital is repositioning as investors seek alternatives. Green explained that the euro and sterling rallying simultaneously reflects comparative policy judgment. “Europe and the UK face structural challenges, but relative stability matters more than perfection. Investors always compare policy paths, and the dollar’s path looks increasingly volatile.”
He highlighted the yen’s role as a defensive asset, noting: “The yen remains a classic hedge in periods of policy uncertainty. Strength toward ¥152 per dollar signals global investors are hedging against policy turbulence in Washington.” Debt dynamics are also resurfacing as a concern. “US debt issuance remains heavy, and fiscal discipline looks secondary to political messaging. FX markets punish that dynamic by demanding a higher risk premium.” Green pointed to tariffs as a core stress factor. “Tariffs raise costs, squeeze margins, and stoke inflation. When policy shifts are abrupt or poorly communicated, the currency absorbs the shock first. Investors discount the long-term drag on growth and trade.” He added that diversification is accelerating across institutions. Green concluded:
“Central banks and sovereign funds operate on trust, liquidity, and governance. Even incremental shifts out of dollar reserves can move markets when private capital mirrors the same trend.”
“The dollar will remain central to global finance, but its supremacy has been cracking in recent years, and this has been accelerated in recent days, with markets now seemingly building an escape route,” he opined.
FAQ ⏰
- Why is the U.S. dollar falling against major currencies?
The dollar is weakening as investors price in rising policy uncertainty, heavy debt issuance, and unpredictable trade decisions. - What did Devere Group warn about the dollar?
Devere Group said the dollar’s global dominance is fracturing as markets lose confidence in U.S. policy direction. - Why are the euro, sterling, and yen rising?
Investors are rotating capital into currencies viewed as more stable or defensive amid U.S. policy volatility. - How do tariffs affect the U.S. dollar?
Tariffs raise inflation risks and hurt growth expectations, which FX markets immediately reflect through a weaker currency.
