The Dollar Keeps Falling as ‘Safe Haven’ Status Is Questioned

The U.S. dollar extended its slide against other major currencies on Monday, the latest sign that investors may be starting to shun what has long been the safest haven in global financial markets.

An index that tracks the dollar against a basket of major trading partners fell for a fifth straight day, even as U.S. stocks and bonds rallied. The dollar has fallen by roughly 8 percent this year, trading near a three-year low.

There has been a particularly steep decline since President Trump announced tariffs on nearly every country’s imports a few weeks ago. The dollar has lost value against the euro, the yen, the pound and a host of other currencies, making imports from those countries more expensive for Americans, even before tariffs are applied.

Investors and many of Mr. Trump’s advisers had expected the dollar to strengthen as tariffs were put in place, given the conventional wisdom that the levies would discourage Americans from purchasing imported goods and in turn reduce the demand for foreign currency. Scott Bessent, the Treasury secretary, argued that the dollar’s appreciation would be significant enough to offset a rise in inflation.

But the magnitude of the tariffs that Mr. Trump has announced has been more substantial than many expected, unleashing turbulence acute enough to raise questions about whether U.S. assets have lost their luster. On multiple days in recent weeks, when the dollar was selling off, so too were U.S. stocks and government bonds, a combination that Krishna Guha, vice chairman at Evercore ISI, described as “rare, ugly and worrying.”

In part, the turmoil reflects the confusion about Mr. Trump’s plans for tariffs. Mixed messages about exemptions and pauses, and which products and countries might be hit with new tariffs, have rattled investors who have long seen dollar-denominated assets like U.S. Treasury bonds as the surest thing in finance.