Morgan Stanley: The uncertainty factors of Trump's policies have a neutral to slightly accelerating impact on de-dollarization

Morgan Stanley pointed out that U.S. President Trump's policies regarding debt, trade, sanctions, security, and key national institutions will be key factors in determining the degree of de-dollarization.

The bank believes that the overall impact of uncertainties related to these policies on the trend of de-dollarization is neutral to slightly accelerating, with short-term developments being crucial in determining the extent of the shift. The bank also noted that although the international role of the dollar has gradually weakened over the past 25 years, there is currently no obvious alternative global reserve currency, with gold remaining the biggest challenger to the dollar. Gold prices have doubled in the past 18 months, bringing foreign central bank gold reserves to about $4 trillion, surpassing the $3.9 trillion held in U.S. Treasury bonds for the first time since 1996.

Morgan Stanley further stated that past analyses show that alliance relationships can increase member countries' reserves of the currency of the alliance leader by about 30 percentage points. The potential disintegration of NATO could negatively impact the dollar, but a turbulent geopolitical environment may also trigger a surge in safe-haven funds, boosting demand for the dollar as a safe-haven asset