'President Trump has launched an unprecedented challenge to a geopolitical order that has prevailed for decades. One potential victim: the U.S. dollar.

In just weeks, a steep increase in tariffs and uncertainty over trade have sparked fears that U.S. growth will slow. At the same time, major shifts in U.S. foreign policy have led to a surge in optimism about the European economy—driving the dollar down sharply against the euro, sending stocks in Europe to records and spurring the biggest jump in German bond yields since just after the fall of the Berlin Wall.

The WSJ Dollar Index has declined seven of the past nine weeks, nearly erasing gains made since the Nov. 5 election.

Such financial upheaval, if sustained, could have ramifications for everything from global investment flows to the direction of trans-Atlantic tourism.

For generations, U.S. political leaders have generally embraced the dollar’s primacy in the global financial system, in part because it has led to cheaper government borrowing. The country’s spending on defense has helped bolster that position by driving up the budget deficit, financed in large part by foreign investors, who hold about a third of U.S. debt.'

Alienating traditional allies also turns things in favour of China which has already won the trade war and is increasingly denominating its trade payments in Yuan an outside of the USD/SWIFT hegemony.