Dollar has lost some of its safe-haven status, ING report says

LONDON, Feb 23 (Reuters) - ‌The dollar ​has ​lost some, but not all, of its safe-haven value since 2024, ING said in note ‌on Monday, adding however, that it saw no ⁠broad deterioration in global demand for the US currency.

The dollar ‌index shed almost 10% ‌of its value last year, in its worst annual performance since 2017. Erratic U.S. trade policy, U.S. ​President Donald Trump's tariff threats towards allies and attacks on the Federal Reserve have weighed on ⁠the currency.

ING said in its report:

* The dollar has lost a chunk ​of its safe-haven value compared to 2024, when measured by calculating the three-month correlation between ​the dollar index and U.S. ‌stocks and 10-year Treasuries.

* Private investors, who hold more than 80% of foreign holdings ⁠of U.S. assets, remain invested.

* Dollar weakness, at this stage, appears more cyclical than structural.

* There are no signs ⁠yet of an acceleration in de-dollarisation, when examining the use ​of the dollar in global assets, liabilities, market turnover and transactions.

* Fed independence is the cornerstone of global financial stability and ‌if the U.S. central bank were to be seen cutting rates inappropriately, "a run ‌on the dollar" could follow.

* Fall in dollar this ⁠year unlikely to match ‌last year's. ING ​sees euro ending year at $1.22, versus current levels around $1.18

(Reporting by Dhara Ranasinghe; Editing by Amanda ‌Cooper)

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