The US dollar’s reign as the world’s primary reserve currency continues to weaken, a trend highlighted in a recent European Central Bank (ECB) report. While the dollar remains firmly in the top spot, a significant shift has occurred: gold has overtaken the euro to claim the number two position.

Investor confidence in dollar-denominated assets experienced a noticeable downturn starting in April. This decline is largely attributed to growing anxieties surrounding unpredictable US trade policies and long-term fiscal stability. ECB President Christine Lagarde has characterized this as a potential turning point, suggesting an opportunity for the euro to emerge as a viable alternative to the dollar. However, she emphasizes that this hinges on the 20-nation eurozone finally implementing promised reforms to enhance financial and capital market integration.