The U.S. dollar is under significant pressure as global debt markets experience mounting stress, according to economist Robin J. Brooks. On January 24, 2026, Brooks highlighted that accelerating bond turmoil and capital flight are threatening the dollar's status as a safe haven. He noted that the dollar's depreciation has resumed, with the DXY index, a measure of the dollar against major currencies, peaking above 106 in early 2025 before declining sharply.
Brooks, a Senior Fellow at the Brookings Institution, emphasized that the dollar's weakening against both G10 and emerging market currencies signals a critical inflection point. He pointed out that low-debt economies like Sweden, Norway, and Switzerland are attracting significant inflows as alternatives to the dollar and yen. The economist warned that the dominant market theme in 2026 is a flight to safety from debt monetization, with precious metals and fiscally disciplined currencies expected to rally further.
U.S. Dollar Faces Pressure Amid Global Debt Market Turmoil
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