It’s been a tough few months for believers in the currency market version of Pax Americana. Dollar critics confidently proclaim that its reign is over. In Asia, this is a “sell America” moment. Any sane investor is scouring the planet for an alternative — one that offers all the advantages of the incumbent but none of the downside. Europeans also want in, extolling the virtues of the euro.
Good luck with that. One of my reservations about this bearishness isn’t that the upheavals induced by President Donald Trump — tariffs, an assault on the rule of law — don’t warrant a weaker dollar. They do, especially given the greenback’s resilience the past few years. Rallies in the yen, the Taiwan dollar, South Korean won and Thai baht look justified from this perspective. Even the Malaysian ringgit, the subject of jarring capital controls imposed by Kuala Lumpur in the 1990s, is having a good run.
