The US dollar’s dominance is quietly eroding. For years, central banks have been quietly chipping away at their dollar holdings, diversifying their reserves in a slow but steady shift away from the greenback. The latest International Monetary Fund data reveals that the dollar’s share of global FX reserves fell to a record low of 57.3% in July-September last year—down from over 72% in 2001. However, in a rare reversal, it edged up slightly to 57.8% in October- December, thanks to a 7.6% surge in the dollar’s value against major currencies—its biggest quarterly jump in nearly a decade. While the move temporarily inflated the dollar’s share, the long-term trend stays clear: global reserve managers are seeking alternatives, and the dollar’s dominance is facing an increasingly diversified future.DataThe Institute for Supply Management manufacturing PMI fell to 49.0 in March from 50.3 in February, slipping back into contraction territory (below the fifty threshold) and missing economists' 49.5 forecast, while factory gate inflation hit a near three-year high. The sector, representing 10.2% of the US economy, showed growing strain as ISM survey respondents cited tariffs as a key concern. Meanwhile, the labour market cooled, with job openings dropping by 194,000 to 7.568 million in February (JOLTS data), signalling that trade uncertainty may be dampening hiring demand.
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