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The case for a weakening USD is strong. The currency is overvalued on almost every metric | Illustration: Ajay Mohanty
6 min read Last Updated : Apr 21 2025 | 9:11 PM IST
One puzzling aspect of the massive volatility over the past few weeks has been that US safe haven assets, namely the US dollar (USD) and Treasuries, have not exhibited typical risk-off behaviour. Instead of investors flocking to buy US Treasuries and remain invested in the USD, both asset classes have actually weakened. Other safe haven assets like the Swiss franc and the yen have seen the usual flight-to-safety bid, but why have the USD and Treasuries lagged?
The weakness in US Treasuries is linked to the precarious fiscal position of the US, the possibility of dumping of Treasuries by global
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