Goldman Warns Dollar’s Safe-Haven Role Is Fading Under Trump’s Trade War

Analysts at Goldman Sachs reportedly warned on Thursday that the U.S. dollar may start trading as a “riskier” currency after it recently hit a three-year low amid global tariff tensions ignited by President Donald Trump’s trade war. 

The U.S. Dollar Index (DXY) gained 0.38% in morning trade, marking a gain of 0.87% for the week. On Stocktwits, retail sentiment around the index has been edging higher within ‘bullish’ territory over the past week amid ‘high’ levels of chatter.

Goldman analysts flagged growing policy uncertainty tied to trade tariffs, concerns over the Federal Reserve’s independence, and increased diversification away from U.S. assets as risks that could drive greater volatility in the dollar, in a note cited by Bloomberg.

“Shifting correlations have left dollar strength in periods of risk-off a less reliable outcome,” the analysts wrote.

They cited the dollar’s rising tendency to sell off in tandem with U.S. equities, which has happened more than twice as often this year as over the past decade, as one of the most notable trends of 2025.

A more troubling signal, they said, is when equities, treasuries, and the dollar all fall at once — a pattern they cited has become more frequent.

The dollar is down nearly 10% year-to-date, pressured by Trump’s tariff escalation against key trading partners. Some analysts have speculated this could mark a permanent shift in how global markets treat the dollar.

In May, economist Kenneth Rogoff warned that Trump’s aggressive trade stance and institutional disruption were accelerating the dollar’s decline. He described trade advisor Peter Navarro as “Rasputin.” A month later, Bank of America reported that investor sentiment toward the dollar had hit a 20-year low, with 31% of global fund managers underweight the currency.

Meanwhile, Bitcoin enthusiasts believe that the U.S. dollar’s decline could be a boon for Bitcoin (BTC), which recently hit a record high, surpassing $112,000.

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Read also: Nasdaq Hits Record Before Retreating As Traders Weigh Trump Tariff Impact