The dominance of the US dollar has long been a subject of concern, but Franklin Templeton believes that the dollar will remain the preferred currency.
Sonal Desai, the chief investment officer of the fixed income department of the company, wrote in a report that the status of the US dollar is supported by three pillars: the scale of the world’s largest economy, the depth of the market, and institutional credibility. She added that there is no other credible alternative at present, and it would take decades to build the institutional infrastructure needed to support such a currency.
As President Trump’s capricious trade, geopolitical and fiscal policies have weakened the appeal of US assets, the debate over the dollar’s hegemonic status has intensified. Some analysts believe that the euro, gold and digital assets could become preferred reserve assets.
Desai wrote: “The eurozone cannot issue a unified safe asset of sufficient scale. The renminbi is subject to capital controls and lacks convertibility.” He was referring to the renminbi. “In my view, the true rival to the dollar has yet to emerge.”
Desai pointed out that the three-year survey data of the Bank for International Settlements in 2025 shows that the US dollar accounts for as high as 89% of the over-the-counter foreign exchange trading volume, while the RMB only accounts for 8.5%.
Desai writes that the current weakness of the US dollar is cyclical rather than structural. In real trade-weighted terms, the dollar is still far above the lows of the mid-1990s and the early 2000s. The dollar’s weakness is in line with its status as a global reserve currency.
Technical analysis:
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Gold: After sweeping through the yellow zone we alerted yesterday, there has been a clear rebound. Today, we will focus on the pullback buying opportunity after the momentum breaks through, as well as the buy limit opportunity in the green zone. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: After a brief dip in liquidity, the price has started to rebound at an accelerated pace and has now reached above 26,200, approaching its historical high. For today, we suggest a wait-and-see approach to avoid uncertainty risks. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Yesterday, the price touched the yellow zone alerted by our plugin and then experienced a pullback. Today, we have moved the yellow zone to around 94.50. We will continue to follow the strategy of scanning for liquidity and then attempting to catch short signals. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Key economic data and events to focus on today:
14:00 UK Industrial Output for February (YoY)
17:00 Eurozone March consumer price index final reading
20:30 U.S. Seasonally Adjusted Initial Jobless Claims (in thousands) (to 0411)
At 20:35, William Dudley, the president of the Federal Reserve Bank of New York, delivered a speech.
