IMF economist says dollar still dominates despite trade shifts

Investing.com -- The U.S. dollar remains the center of global trade and finance despite recent changes in trade relationships caused by tariffs, according to the International Monetary Fund's chief economist.

Pierre-Olivier Gourinchas said Friday that the dollar continues to anchor international trade, banking and central bank reserves. His comments come after President Donald Trump imposed unilateral tariffs on most countries.

"We are seeing very, very little in terms of movements that would indicate that we're moving away from a dollar-centered world. We are very firmly in the dollar-centered world," Gourinchas told reporters. "That doesn't mean that it couldn't change at some point, but really the set of developments we've seen the 10 years, we're seeing very, very minor things."

Gourinchas, who will leave the IMF next week to return to teaching, said recent sharp increases in gold prices have been driven mainly by gold exchange-traded funds that allow investors to buy gold without holding the physical metal. Stablecoin issuers are also holding gold as an asset, which has pushed demand and prices higher. Central banks are not actively buying gold, he added.

Gold rose Friday as the dollar weakened and expectations of U.S. interest rate hikes eased slightly following Thursday's U.S. inflation data, which suggested price pressures may have peaked. Spot gold was up about 1.4% to $4,083 per ounce in early afternoon trading. Gold was still on track for a fourth consecutive weekly decline.

The U.S. dollar eased from recent highs after the release of the Fed's preferred inflation gauge Thursday.

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