Uncertain dollar creates opportunity for euro. Can it last?

President Trump's shake-up of the global trade system has sent tremors through the long-held view that the United States is the source of the world's safest financial assets.

- ESHE NELSON

That's created an opportunity for Europe.

The market tumult in which investors simultaneously sold off the US dollar, American stocks and US Treasury bonds eased last week as Trump backed off his threats to fire the Federal Reserve chair, Jerome H Powell, and Treasury Secretary Scott Bessent tried to reassure foreign officials that trade deals would be struck.

But many European officials attending the spring meetings of the International Monetary Fund and World Bank in Washington last week were skeptical that the uncertainty over Trump's trade policy would dissipate any time soon. They said the unpredictable nature of the Trump administration's approach to setting policy would not easily be forgotten. Instead, they saw the potential to attract investors to European assets, from the euro to the bond market.

"We see that our stability, predictability and respect for the rule of law is already proving a strength," Valdis Dombrovskis, the European commissioner responsible for the trade bloc's economy, said on Wednesday in a discussion on the sidelines of the IMF meetings. "We already have stronger investor interest in euro-denominated assets."