The dollar has reversed two years of gains against advanced economies, but the moves are more muted compared to the broad dollar index and emerging markets. The speed of the decline is a concern, yet the dollar is still within a long-term range after a substantial gain. The question is whether the dollar is declining because there is less confidence in the US economy and financial system. It is a signal of US weakness, and that is a problem.
The dollar remains the reserve currency, primarily due to its role as a medium of exchange; however, the store of value argument is problematic.
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