In an in-depth feature by the Financial Times examining the impact of recent U.S. tariff policies on the global monetary system, Stephen Jen, CEO of Eurizon SLJ Capital, offers perspective on the overvaluation of the U.S. dollar and the growing risks to its long-standing reserve currency status.

The article compares recent actions by the Trump administration to the 1971 “Nixon shock” and explores whether the current policy regime could mark a structural turning point for the dollar’s global role.

Drawing from a recent client letter, Stephen is quoted:

“The stars are aligning for the dollar to embark on a multiyear correction,” Jen wrote in a letter to clients last week. “The dollar’s overvaluation has been one factor contributing to the US’ loss of competitiveness over the years, and the burgeoning trade deficit and tariffs are a reaction to this unpleasant reality.”

Stephen also notes that the dollar remains around 19% overvalued against its major peers, and that a combination of cyclical, structural, and political pressures could drive a sustained weakening of the greenback.

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