Selling Dollars, Not America

🎯 GBP/USD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.

The U.S. economy is too attractive for a true 'Sell America' episode to become embedded. Official White House Photo by Daniel Torok.

2026's dollar weakness isn't part of the 'Sell America' trade, points out an analyst we follow.

"The market isn't inclined to sell America; it just wants to sell dollars," says Jeremy Boulton, a Reuters market analyst. "Treasuries have remained stable and stocks have surged to record highs."

The observation is a rebuttal to pervasive analysis that links the 'Sell America' trade with the currency's losses.

For FX markets, the driver of USD weakness is critical because a true Sell America episode would imply broad, correlated selling of the dollar alongside equities and Treasuries, with more unstable price action and larger downside tail risks.

This is particularly relevant for those buying downside protection, which is increasingly costly.

To be sure, recent losses have been sizeable on recent measures: the GBP/USD exchange rate is back to a 4-year high at 1.3869 and EUR/USD to 1.2088.

However, Boulton says the USD move is not disorderly, and that matters.

"If the dollar's decline were to become extreme, there would be reason for concern, but that is far from today's reality. In truth, the dollar has surrendered only a small fraction of the gains accumulated between 2011 and January 2025," points out Boulton.

"In that regard, the dollar's decline - which stimulates the U.S. economy, supports the stock market and cheapens exports amid a trade war - is welcome news for the Trump administration," he adds.

🎯 GBP/USD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.

If we're not in a Sell America scenario, dollar depreciation can unfold gradually, offering opportunities to time hedges, stage conversions, and exploit relative-value trades rather than needing to price in systemic stress or disorderly capital outflows.

The Sell America trade is a market narrative that emerged in 2025 where investors reduce exposure to U.S. assets simultaneously, typically selling US equities, U.S. Treasuries, and the dollar, on the view that relative returns in the United States are deteriorating due to factors such as slower growth, fiscal stress, political risk, or a shift in global capital toward other regions.

It usually emerges when confidence in U.S. exceptionalism fades, leading to higher Treasury yields from selling pressure, a weaker dollar as capital flows out, and underperformance of US stocks versus global peers, with the trade often framed as a rotation rather than a single directional bet.

President Trump triggered a renewed bout of USD selling Tuesday when he indicated he was relaxed about the currency's recent selloff, implying it was good for the economy.

The stance reaffirmed suspicions that the administration is active in pursuing a weaker currency.

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Boulton points out Trump's efforts to reduce America's trade gap is working, and a weaker dollar will facilitate progress.

In the first three quarters of 2025, the U.S. current-account deficit narrowed from $450 billion to $226 billion.

"Should the dollar fall further, the shortfall could narrow more. And while the dollar is giving back a bit of strength, there is little for the U.S. administration to worry about, as it remains broadly strong and aligned with policy objectives," says Boulton.