ECB’s Villeroy: US policies undermine dollar confidence

Investing.com -- European Central Bank policymaker Francois Villeroy de Galhau warned on Tuesday that concerns about the U.S. administration potentially weaponizing the dollar payments system are eroding investor confidence and driving demand for alternatives.

Speaking at the Bank of France, which he also heads, Villeroy pointed to several factors contributing to this trend, including attacks on the Federal Reserve’s independence, questions about Washington’s fiscal discipline, and tariff policies.

"These US policies are undermining global investors’ confidence in USD assets and will likely fuel the gradual trend toward diversification," Villeroy said.

The ECB official noted that fears about the U.S. increasingly weaponizing the dollar-based global payments system have prompted some jurisdictions to develop alternative payment systems.

These concerns come as global financial markets continue to evaluate the potential long-term impacts of U.S. monetary and fiscal policies on the international financial system.

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