The dollar’s demise has been predicted for 55 years. The BCG Institute says it’s still overstated

The market takeaway is not that the dollar is cheap or expensive, but that reserve-currency demand is a structural flow, not a valuation trade. That matters because the persistent buyer is not a discretionary macro fund; it is sovereign reserve managers and global balance sheets that still need dollar liquidity, which keeps USD funding spreads tighter than most competitors and supports U.S. asset prices on drawdowns.

The real losers are not just EM borrowers with USD liabilities, but any non-U.S. issuer trying to finance long-duration growth in a world where the marginal reserve asset is still Treasuries. If the dollar stays the “least bad” reserve option, the second-order effect is continued pressure on foreign equity multiples via translation, funding, and capital outflow sensitivity, especially in Europe and commodity-linked EM.

This is not an immediate catalyst trade; over 1-3 months the driver remains relative rates and risk sentiment, not reserve-primacy theory. The thesis would be falsified by a sustained break in USD strength alongside a clear convergence in real yields, or by a credible policy step that creates a deeper euro safe-asset market; both are multi-quarter to multi-year developments, not a near-term regime change.