Despite a brief rally amid escalating Middle East tensions, the dollar has depreciated 8% year-to-date against a basket of major currencies. This decline follows the greenback's sharp surge in Q4 2024. According to Bloomberg, such volatility signals waning confidence in the US currency.
US Bank reports that importers are increasingly reluctant to accept payments in dollars. Many companies now convert greenbacks into euros, yuan, or Mexican pesos to hedge against further volatility in the American currency.
Corpay strategists note this shift is difficult to quantify in real time, yet observe growing preference for non-dollar contracts among exporters across markets from East Asia to Latin America.
According to International Monetary Fund data, an average of over 90% of export invoices in North and South America were denominated in the US currency between 1999 and 2019. In the Asia-Pacific region, this figure stood at approximately 75%. However, current trends indicate a deterioration in the dollar's dominance.