Dollar crisis looms, warns Deutsche Bank

Deutsche Bank is warning about a potential crisis of confidence in the U.S. dollar, saying that major shifts in capital flow allocations could take over from currency fundamentals. The dollar, which is the world’s primary reserve currency, faced significant selling pressure following U.S. President Donald Trump’s tariff announcements, raising fears of a recession. George Saravelos from Deutsche Bank cautioned that a rapid decline in the dollar could lead to disorderly currency movements, which would be detrimental to global central banks. He said: “The last thing the [European Central Bank] wants is an externally imposed disinflationary shock from a loss in dollar confidence and a sharp appreciation in the euro on top of tariffs . . . Expect pushback. We are in the midst of dramatic regime change in markets.”