The long-standing mechanism that has historically insulated the US dollar from market turbulence is eroding, leaving the greenback increasingly vulnerable to external shocks.
MarketWatch reports that the bond-market buffer, which has long served as a stabilizer for the currency, is fading as investors reassess the structural integrity of US debt markets.
This shift coincides with a broader stress test of traditional safe-haven assets.
US Treasury yields climbed sharply on Monday, signaling that the conventional playbook for navigating market turmoil is no longer functioning as expected.
The rise in yields suggests that investors are demanding higher compensation for holding US debt, even during periods of uncertainty, which undermines the dollar's traditional strength.
The development aligns with a stark warning issued by Deutsche Bank regarding the structural integrity of the US dollar.