Invesco: 60% of central banks believe US debt levels have a negative impact on the dollar.

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Jinse Finance reports that on June 29, a survey by Invesco found that concerns about the dollar are "widespread and deepening," with 61% of central bank respondents stating that U.S. debt levels negatively impact the dollar's long-term status as a reserve asset, compared to 20% in 2024. Although the Iran war has boosted the dollar by 3% this year, analysts say that U.S. policy uncertainty and high debt mean the dollar may weaken in the long term. While any shift away from dollar investments is likely to be gradual due to the lack of credible alternatives, the Invesco survey shows that 29% of respondents believe the dollar's reserve currency status will weaken within five years, up from 12% in 2022. Invesco says that due to geopolitical tensions, multiple institutions have also reported reassessing their reliance on U.S. custodians, counterparties, and clearing infrastructure. Meanwhile, one-third of respondents said they intend to increase gold holdings in response to the trend of diversification.
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