"Sell America": US Dollar Collapse Boosts Safe Havens Yen, Franc and Euro

April 11, 2025 - Written by David Woodsmith

STORY LINK "Sell America": US Dollar Collapse Boosts Safe Havens Yen, Franc and Euro

There has been further surge in demand for defensive assets overnight with evidence of panic dollar selling in markets.

According to ING; “The question of a potential dollar confidence crisis has now been definitively answered – we are experiencing one in full force.”

Selling intensified in early Europe as China increased tariffs on imports from the US to 125%.

US equity futures are slightly lower after a 3.5% slide on Thursday while European bourses have seen renewed selling.

Sterling has been caught in the middle of global fire sales with the Pound vulnerable when risk appetite slides and not seen as a defensive asset.

In this complex environment, the Pound to Dollar (GBP/USD) exchange rate has surged to highs around 1.3085 amid the dollar slide.

According to UoB; “The price action has shifted the outlook to positive. The two technical levels to watch are 1.3210 and 1.3290.”


The Pound to Euro (GBP/EUR) exchange rate, however, has dipped sharply again to 14-month lows near 1.1460 before a tentative recovery to 1.1500.

Importantly, one traditional safe asset has been US Treasuries, but this time is very different with bonds also under selling pressure.

The 10-year yield has jumped to 4.45% while the 30-year yield is around 4.90% and close to 16-year highs.

MUFG commented; “The long-end of the bond market is clearly suffering and if investors increasingly question the reliability of the usually most reliable safe-haven asset it will further reinforce investor uncertainty and increased financial market volatility. This seems more likely than not over the near-term.”

With a smaller number of candidates, demand for the smaller pool of safe assets has been even stronger.

Gold, for example, has hit a fresh record high above the $3,200 level.

USD/JPY has dived to below 143.00 while the Swiss franc has surged with USD/CHF slumping to 14-year lows below 0.8150.


Contrary to some expectations, the Euro has also been a beneficiary of defensive demand. EUR/USD has surged to 3-year highs above 1.1400.

According to ING; “The dollar collapse is working as a barometer of “sell America” at the moment. The rotation to other traditional safe-havens like CHF, the Japanese yen or even the euro is justified by the loss of USD safe-haven appeal. But the USD drop against high-beta currencies (including the China-sensitive AUD and NZD) is a signal that markets are heavily building positioning for a broad-based dollar decline.”

President Trump’s decision to delay reciprocal tariffs on most countries triggered a relief rally in risk assets, but overall confidence remains extremely fragile and Wall Street indices dipped again on Thursday.

There has been further evidence of a loss of confidence in US assets with losses for Equities, bonds and the dollar.

The US trade policies have damaged confidence in the US economy and there are still recession fears amid major disruption to shipments from China.

Treasuries posted further losses with the latest US budget resolution increasing fears over the long-term outlook.

The US House of Representatives has passed a budget bill that includes trillions of dollars in cuts to both taxes despite opposition from Democrats and Republican hard-liners.

Some Republican holdouts were convinced by promises to cut spending, but the tax cuts are still projected to widen the budget deficit sharply.

The House and Senate versions will now have to be reconciled before the Bill can be passed into Law.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts