A new report from ING confirms the U.S. dollar has lost some of its safe-haven appeal since 2024, a shift attributed to Federal Reserve policy volatility. Despite this, the dollar’s global dominance remains largely unchallenged, with private investors holding over 80% of foreign U.S. assets and no clear acceleration in de-dollarization seen in global transactions.
The U.S. dollar faces a changed landscape as a key safe-haven asset. A recent ING report states the currency’s status has diminished since 2024 based on correlation analyses with U.S. stocks and Treasuries.
This decline is linked to the dollar consistently falling amid the Federal Reserve’s uncertain stance on rate cuts. The weakness is currently viewed as cyclical rather than a sign of structural decline in the dollar’s global role.
“The dollar has lost a chunk of its safe-haven value compared to 2024,” the report stated. It found the current dollar drop appears more cyclical than structural, with no signs of accelerated de-dollarization in global assets, liabilities, or transactions.
The dollar now faces significant competition from gold as a reserve asset. Data shows the dollar’s share of global currency reserves has fallen to approximately 40%, an 18-point drop over ten years.
Conversely, gold’s share has risen 12 points to 28% in the same period, reaching its highest level since the early 1990s. “Gold now accounts for more global FX reserves than Euro, Yen and Pound combined,” according to the data, as central banks continue diversifying.
