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Dollar slides as safe-haven role faces renewed questions

Rabobank says the US Dollar Index is down about 2% from late July and that the drop has revived concerns about the greenback's safe-haven appeal.

Reported · Written up by our desk · Major Pairs

Rabobank’s FX strategists said the US dollar is facing renewed skepticism about its safe-haven status as the US Dollar Index, or DXY, has fallen about 2% from late July. FXStreet notes Rabobank’s view that the dollar has been the weakest G10 currency over the past week.

In a review of drivers behind USD sentiment, Rabobank pointed to the Middle East and Iran conflicts, Trump’s tariff actions, and rhetoric around potential rate cuts, alongside expectations for Federal Reserve policy. The strategists argued that these forces have clouded perceptions of the dollar’s reserve currency role and its place in international payments.

Rabobank said questions about the safe-haven role were also raised after dollar weakness last spring, when both the US dollar and US Treasuries lost momentum following tariff announcements in April 2025. It also cited concerns about Fed credibility as an additional factor that weighed on the greenback’s performance last year.

Despite earlier support since May from speculation about Fed rate hikes, Rabobank said the dollar’s recent decline has stirred fears that last year’s negative sentiment could return. FXStreet framed the development as a test of whether a prior USD rally can be sustained.

Latest closeDollar index 99.99 ▲0.2%

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