Is it time to diversify away from the U.S Dollar?

Stephen Grootes speaks to Patrick Mathidi of Aluwani Capital Partners and Gary Booysen of Rand Swiss about whether it’s time to diversify away from the US dollar, and what that might look like.

Listen to the interview in the audio player below.

For decades, the U.S dollar has been the unquestioned anchor of the global financial system.

It has been the world’s dominant reserve currency, the primary unit of trade, and the default “safe haven” during periods of financial stress.

For many investors, the assumption that the dollar is inherently safe has gone largely unchallenged.

That assumption is now being tested.

Concerns about rising U.S debt, large fiscal deficits and geopolitical issues have led many investors to question whether heavy reliance on the U.S dollar still makes sense.

So is the U.S still worth investing in?

Speaking to Stephen Grootes on The Money Show, Patrick Mathidi, head of multi asset strategies at Aluwani Capital Partners says despite growing uncertainty, the U.S remains a unique investment destination.

"What is clear though is that, the shift away from the dollar is based on what one can see, sort of transient factors, to do with the uncertainty that has been brought about by the Trump presidency."

- Patrick Mathidi, head of multi asset strategies - Aluwani Capital Partners

"The one thing that capital likes the most is some element of certainty. And in an environment where there is less and less certainty, you do find the flow of capital going into other markets where it can find a bit more comfort."

- Patrick Mathidi, head of multi asset strategies - Aluwani Capital Partners

Much has been made of “de-dollarisation”, but will we ever see that happening?

Gary Booysen, director and portfolio manager at Rand Swiss says the term 'de-dollarisation' has become a buzzword now, with growing talk about whether greenback still holds to power it's had for so long.

"It's the reserve currency of the world. Is this the time that it's really being called into question? Is there going to be a true de-dollarization? Are we going to see settlement currencies like BRICS, the unit being created?"

- Gary Booysen, portfolio manager - Rand Swiss

"Even the neighbour of the U.S, Canada which has been the brunt of many of Trump's vicious rhetoric attacks is now sick of this and looking for other alternatives. That does signal that this could potentially be a true regime change for the U.S dollar."

- Gary Booysen, portfolio manager - Rand Swiss

Scroll to the top of the article to listen to the full interview.