The decline of the US dollar continues! Analysts: "Triple kill in stocks, bonds, and currencies" is due to the structural dilemma facing US assets

For a long time, the US dollar has been regarded as a "safe haven" in global financial markets during turbulent times, but now, this "financial hegemon" seems to be losing its luster. So far this year, the dollar has continued to depreciate, while at the same time, the simultaneous turmoil in US Treasury bonds and the stock market has put American assets in a structural dilemma.

According to the Zhitong Finance APP, this Friday, the ICE Dollar Index briefly hit a three-year low, with a year-to-date decline of nearly 8%. Meanwhile, the yields on 10-year and 30-year US Treasury bonds surged significantly, recording the largest weekly increases since 2001 and 1987, respectively; although the three major US stock indices ultimately closed higher, the overall performance this week resembled a "roller coaster," with continuous violent fluctuations.

The research institution Evercore ISI, under the New York investment bank Evercore, described the simultaneous decline in the prices of the dollar, bonds, and stocks as "rare, bad, and concerning" in a report. This combination indicates that funds are massively withdrawing from the US market, rather than shifting to another safe-haven asset as in the past when one type of asset declined.

The sudden loss of favor for the dollar has sparked speculation among many market participants. Evercore ISI likened the current situation to the "Nixon Shock" period of the 1970s. At that time, to respond to international speculators' attacks on the dollar, President Nixon announced the decoupling of the dollar from gold in 1971, leading to the subsequent stagflation era. Now, the market is once again questioning the dollar's status as the global reserve currency.

Marc Chandler, chief market strategist at Bannockburn Global Forex, bluntly stated, "The current situation is even more serious than during the Nixon era." He pointed out that the uncertainty and turbulence brought about by tariff policies are damaging the global image of the "American brand," "just like the 'New Coke' launched by Coca-Cola in 1985, which was ultimately strongly resisted by the market."

He warned that there are even claims of a "capital strike" in the market, with foreign investors continuously selling off US Treasury bonds, US stocks, and other dollar assets, which could likely weaken the United States' leadership position in the global economy.

This week, the Trump administration announced a 90-day 10% low tariff on most countries except China, which temporarily spurred US stocks to achieve the largest single-day gain. However, China subsequently raised tariffs on the US to 125% in response, and the US also announced a total of 145% tariffs on China.

Such intense trade disputes have further exacerbated market tensions, leading investors to withdraw from dollar assets and question whether the US can still maintain its "economic exceptionalism" status.

George Saravelos, a strategist at Deutsche Bank, stated, "The structural appeal of the dollar is being reassessed by the market, and the process of de-dollarization is rapidly unfolding." This is particularly evident in this week's foreign exchange and bond market trends. He pointed out that the core issue in the current market is not inflation or stagflation, but rather global investors' distrust of the erratic nature of US policies.

Evercore ISI also emphasized, "This is not a stagflation issue, but rather the advantage of US economic growth is evaporating, and the appeal of dollar assets as a reserve tool is marginally decreasing."