A senior executive at JPMorgan Asset Management warned Thursday that America’s currency is positioned for long-term decline as concerns mount over the nation’s rising debt burden.
Despite gaining approximately 1.8% since late February when the Iran conflict began, the dollar faces fundamental challenges that could undermine its strength over time, according to Patrick Thomson, CEO EMEA at JPMorgan Asset Management.
Speaking at an ICMA conference in London, Thomson acknowledged the continued dominance of US Treasury securities while expressing concerns about America’s financial foundation.
“The hegemony of the U.S. Treasury is still alive and well…but we look at the fiscal balance and trade and the ability to pay back that debt,” Thomson stated during the panel discussion.
Thomson emphasized that America’s mounting fiscal challenges present serious long-term risks for the currency’s stability.
“There is an argument to say over the long term the U.S. dollar will weaken. The dynamic of the fiscal position in the U.S. is creating that level of debt that is not sustainable in the long run,” he explained.
The executive also suggested that Europe might emerge as an alternative destination for investors seeking secure assets in the future.
