Analysts have commented that investors are unsettled both by Trump’s willingness to launch a trade war and by his intention to make a temporary tax cut permanent at a time when U.S. public finances are on an unsustainable trajectory. Trump’s enthusiastic embrace of cryptocurrency has also raised questions about his long-term plans for the dollar.
At the same time, however, Trump’s encouragement of private digital currencies linked to the dollar, so-called stablecoins, may expand and entrench the greenback’s dominance, European Stability Mechanism head Pierre Gramegna said last week. Both Gramegna and the ECB see this as a potential threat to Europe’s own monetary sovereignty.
Jacopo Barigazzi contributed to this report.
