Dollar Slide Not About Reserve Status, Says BlackRock's Boivin

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00:00Let's turn to the U.S. dollar. The index down 8% year-to-date, facing ongoing volatility.

00:05Jean Bavan, head of the BlackRock Investment Institute, writes,

00:08We see the U.S. dollar slide tied to expected Fed rate cuts and fiscal concerns, not evidence.

00:14Its reserve status is under threat.

00:17Jean joins us now for more. Jean, good morning.

00:19Good morning.

00:19How difficult are people finding it to draw a distinction between one and the other?

00:24Yeah, I think, you know, if you look at this year and the commentaries around the dollar and so on,

00:29and connect the dots between, you know, uncertainty and policy and so on,

00:34it's easy to tell a story that investors are more skittish about the dollar

00:38and it's a specific dollar kind of risk premium that is being applied.

00:42But, I mean, when you look under the hood and the facts so far this year,

00:45I mean, there's no massive disconnect between the dollar weakness we've seen

00:48and historical fundamentals behavior.

00:51And so on the face of it, you know, there might be down-the-road question

00:56about the reserve currency status, but I don't think we have the evidence for it yet.

01:00I think, moreover, when you look, since, you know, all the discussion about central bank

01:04and dependence and so on, like, eat it up over the summer and a bit before,

01:08the dollar didn't really weaken against other kind of G10 currencies.

01:12So we think it's more of a broader fiscal story globally.

01:17You see a yield curve steepening, and that has some impact on gold versus currencies.

01:23But I don't think we see really a U.S. dollar kind of reserve currency trade yet.