Posthaste: Canadian dollar gaining ground on world stage in 'veritable landslide of loonies'
Still the top dog on the world stage, the U.S. dollar has been slipping of late — so much so that it recently raised a red flag in the presidential election.
Declaring that the greenback is “under major siege,” Republican candidate Donald Trump vowed to impose a 100 per cent tariff on goods from countries that move away from using it in international trade.
“I’ll say, ‘you leave the dollar, you’re not doing business with the United States. Because we’re going to put a 100 per cent tariff on your goods,’” he said at a rally in Wisconsin.
In fact, the U.S. dollar’s dominance has been declining for awhile.
Its share in global foreign exchange reserves fell to 58.2 per cent in the second quarter of 2024, the lowest since 1995, say National Bank of Canada economists Warren Lovely and Kyle Dahms in a report out this week.
After a peak in 2001 of almost 73 per cent, the currency has been on a downward track, with a steep drop after the start of the COVID-19 pandemic.
While the share of other “super-majors” such as the euro and Japanese yen have stayed about the same, less traditional reserve currencies appear to be picking up the slack, said the economists.
Among them, the Canadian dollar stands out. No other currency has seen its share of allocated reserves grow faster over the past four years, the economists say. With its share increasing in 13 of the past 17 quarters, the loonie has surpassed the allocation to the Australian dollar and Chinese renminbi.
That share now stands at 2.68 per cent, up almost 1 percentage point from 2020 — and Lovely and Dahms say while that might not sound like much next to America’s lion’s share, it translates into a lot of dollars.
“With [total] allocated reserves of about US$11.5 trillion, even
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