US Dollar to Face $2.5 Trillion ‘Avalanche’ as Asian Investors Get Fed Up – Who Saw That Coming?

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Well, well, well. Looks like the US dollar is about to get a major reality check. Apparently, Asian investors and exporters have been stacking up all these lovely US dollars—ready to dump them faster than you can say “trade war” if things keep going south. Analysts from Eurizon SLJ Capital, Stephen Jen and Joana Freireat, have some bad news for the greenback. You might want to sit down for this one.

According to these macroeconomic wizards, the US dollar is about to be hit by a *massive* sell-off. We’re talking about $2.5 trillion worth of selling. Yep, trillion with a T. They claim that if this trade war keeps heating up, those Asian investors might just start hauling their cash back home or scrambling to protect themselves from the slipping dollar.

And guess what? That could mean a massive $2.5 trillion “avalanche” of selling. Yikes. Sounds like a rollercoaster you don’t want to be on.

“We suspect these dollar hoardings by Asian exporters and institutional investors may be extremely large – possibly on the order of $2.5 trillion or so – and pose sharp downside risks to the dollar vis-à-vis these Asian currencies.” Yep, that’s a direct quote. Doesn’t exactly inspire confidence in your wallet, does it?

Oh, and it’s not like the US dollar is doing well on its own. According to Bloomberg’s handy-dandy dollar gauge, the greenback has lost about 8% since February. Meanwhile, Asian currencies are flexing and showing the dollar who’s boss.

But wait, it gets better! Trump decided to toss a little spice into the mix by signing an executive order that slapped a 10% tariff on all imported goods coming into the US. Oh, and did I mention he also put reciprocal tariffs on a bunch of countries? It’s like a tariff party, and everyone’s invited.

But hey, not all hope is lost. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are off to Switzerland this week to talk trade with China. Maybe they’ll sort things out… or maybe it’ll be like watching a couple of toddlers fight over a toy. Stay tuned.

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2025-05-08 10:29