PIMCO’s CEO, Emmanuel Roman, recently shared his optimistic outlook on the US dollar and its continued dominance in the global financial system. He believes the US will remain a safe haven for investors, despite concerns about the national debt and past trade disputes.
The Dollar’s Unrivaled Liquidity
Roman highlighted the US dollar’s unique position as the world’s reserve currency and the unparalleled liquidity of the US Treasury market. He acknowledged that the dollar might be slightly overvalued and diversification is wise, but stressed that its status as the primary reserve currency remains unchallenged. There’s simply no other place to park trillions of dollars, he pointed out.
American Exceptionalism and Investor Confidence
Roman also attributed the dollar’s popularity to what he termed “American Exceptionalism.” This refers to the perception of the US as having superior values, political systems, and historical development. He cited the efficiency and liquidity of the US financial system as a key draw for global investors, using the example of Japanese institutions holding around $1 trillion in US debt as a hedge against the yen. This, he argued, is a significant factor in global capital flows.
Disclaimer: This information is for general knowledge and shouldn’t be considered investment advice. Always do your own research before making any investment decisions.
/p>