Rabobank said the de-dollarisation debate sharpened in April 2025 when tariff announcements failed to deliver a traditional safe-haven bid for the USD or US Treasuries. The bank flagged incentives for some countries and regions to reduce reliance on the USD payments system, and framed the theme as one likely to persist essentially regardless of the outcome of the next US presidential election.<\/p>\n\n
It expects any shift away from the Dollar to unfold slowly and face resistance from the US Treasury, leaving near-term USD performance still driven by cyclical factors. Since the start of the Iran war, interest rate differentials have been a key influence on G10 FX, with GBP initially supported by a rise in speculation around central bank rate hikes, though part of that move has since unwound.<\/p>\n\n
While the debate around de-dollarisation is a long-term structural theme, we see it as a slow process that is not the primary driver for trading in the next few weeks. Data shows BRICS+ nations have increased their collective central bank gold holdings by over 12% since the start of 2026, but this is a gradual shift. Therefore, our immediate focus remains on cyclical factors like interest rate differentials.<\/p>\n\n
We believe the dollar will remain supported by the relative strength of the U.S. economy and a cautious Federal Reserve. While the May 2026 non-farm payrolls report showed a slight cooling with 195,000 jobs added, it is not weak enough to prompt an imminent rate cut. Since the Fed\u2019s latest dot plot continues to signal only one potential cut by year-end, the policy gap with the European Central Bank, which already cut rates this quarter, favors the dollar.<\/p>\n\n
For derivative traders, this points to opportunities in buying call options on the U.S. Dollar Index (DXY) to profit from further strength, especially against the Euro and Yen. With the VIX volatility index currently moderate near 17, option premiums are not excessively high, offering an attractive risk-to-reward setup. We recommend looking at expirations in the August-September timeframe to capture potential moves following the Jackson Hole symposium.<\/p>\n\n
This situation is similar to the 2014-2016 period, when diverging monetary policies led to a prolonged dollar rally. Traders holding significant non-USD assets should consider using options to hedge against further dollar appreciation. A simple strategy would be to purchase out-of-the-money puts on currency pairs like EUR\/USD to protect portfolios from a downside move.<\/p>\n\n\n\n