Figure 1 shows that overseas US stock funds have experienced the second-largest outflow of funds in history, while Figure 2 illustrates the recent continuous decline of the US dollar against major currencies (dark blue line) decoupled from the relevant interest rate differentials (blue line), indicating a lack of confidence in the dollar in the market.
Nomura's Charlie McElligott:
The &#34;American exceptionalism&#34; that has existed for decades—where people treat it as a de facto &#34;arbitrage trade&#34; long (funded by short positions in markets outside the US)—is being unwound/de-leveraged, resulting in a slow-burning asset reallocation.
Goldman Sachs expects the dollar to continue to decline:
If tariffs, as we anticipate, put pressure on the profit margins of US companies and the real income of American consumers, then tariffs may undermine this superiority, thereby shaking the core pillar of the dollar's strength.
The most obvious short-term risk to this view is the destructive market movements typically associated with &#34;dollar hoarding.&#34;
The 90-day &#34;pause&#34; has somewhat alleviated this risk, even widening the path for dollar depreciation, as the upcoming deadline reinforces the role of tariffs in exacerbating uncertainty.
By temporarily avoiding some of the harshest new tariff measures, investors may feel more confident about shorting the dollar, as the economic outlook appears bleak but not dark.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/2d309bb8-424d-43cd-96ad-104b65476b44.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/2d309bb8-424d-43cd-96ad-104b65476b44.jpeg"/>

Global investors' confidence in dollar assets has shaken, with overseas US stock funds experiencing the second-largest outflow of funds in history, and the dollar continuing to decline against major currencies. Nomura analysts pointed out that the end of American exceptionalism has led to asset reallocation. Goldman Sachs expects that tariffs will put pressure on US corporate profits and consumer income, further weakening the dollar's strength. In the short term, the risk of dollar depreciation has increased, but the 90-day "pause" measures may alleviate some risks, and investors' confidence in dollar short positions has strengthened

- Recent data shows that U.S. equity funds have experienced the second-largest outflow in history, while the dollar has been declining against major currencies, indicating a lack of market confidence.  
- Nomura's Charlie McElligott notes that the long-standing "American exceptionalism" is being unwound, leading to a slow asset reallocation and de-leveraging.  
- Goldman Sachs predicts continued dollar depreciation due to tariffs impacting U.S. corporate profits and consumer income, although a temporary pause in new tariffs may boost investor confidence in short positions against the dollar.