Financial institutions are reducing their holdings of dollar assets and increasing investments in the European market

ChainCatcher news, according to the Financial Times, the world's largest financial institutions are reducing their dollar assets and increasing investments in European markets. Data shows that investors are massively withdrawing from the U.S. stock and bond markets. This long-term divestment trend is influenced by political chaos in Washington, declining confidence in the Federal Reserve, and the latest tariff disputes initiated by Trump.

Since January of this year, the dollar has depreciated by more than 7%, and traders are now watching for signs of funds shifting to safer European investments like German bonds. According to a Bank of America survey, in March, investors made the largest-ever reduction in U.S. stock holdings, with the speed of the shift to Europe being the fastest since 1999.

Multinational pension funds are leading this divestment wave. Finland's Veritas Pension Insurance Company, Australia's UniSuper fund, and Denmark's pension fund have all reduced their U.S. assets. The head of strategy at BNP Paribas stated that if European pension funds were to reduce their exposure to U.S. assets to 2015 levels, it would mean selling off €300 billion worth of dollar-denominated investments.