UBS Global Research Bullish on US Dollar’s Reserve Currency Status – Key Factors Driving Dominance Revealed
UBS Global Research maintains a bullish outlook on the US dollar’s continued dominance as the world’s primary reserve currency. Despite concerns, analysts highlight factors supporting the greenback’s position for years to come, including deep liquidity and stability.
The US dollar’s cornerstone role is backed by historical currency regime stability, unparalleled liquidity in global markets, and the country’s institutional strength. While potential for a more diversified currency system exists, the dollar’s reign is expected to persist.
Gold is identified as a key diversifier, with UBS predicting a price increase to $2,600/oz by year-end. Central bank buying and geopolitical risks are driving factors for gold’s appeal as a hedge.
UBS recommends the Swiss franc as an alternative to the US dollar, citing its safe-haven appeal. Geopolitical risks could accelerate the shift towards a multi-polar currency system.
In conclusion, while the US dollar’s dominance is likely to continue, investors should consider diversifying with assets like gold and the Swiss franc to mitigate risks and maximize potential returns.