Bank of England governor says fears of weakening dollar dominance exaggerated

Andrew Bailey, the head of the Bank of England, considers fears about the dollar losing its status as a reserve asset exaggerated. According to Bloomberg, the spread of such negative opinions about the US currency was caused by a drop in its rate and the price of US Treasury bonds in response to President Donald Trump's unstable policies.

It will take significant changes to displace the dollar as the main reserve currency, Bailey said. Much of the structure of global markets is built around the dominance of this monetary unit, argues the governor of the British regulator. He made this statement amid growing doubts about the US continued supremacy in the global economy.

The dollar usually strengthens in times of market turmoil because it is considered a safe-haven asset, Bloomberg explains. However, after Trump announced sweeping trade tariffs against countries worldwide, the American currency fell against its major peers. Since the beginning of April, the British pound has climbed 3% against the dollar, and the euro has gained 5%. The Bloomberg Dollar Spot Index has fallen nearly 4% this month, marking its worst performance in two years.