Deutsche Bank has raised concerns as the US Dollar Index falls to a three-year low, indicating a diminishing allure of the greenback as the world's reserve currency. The bank warned that this trend could lead to unsustainable spending in the US. Reasons for the dollar's weakening include backlash from tariffs and challenging repercussions that the US might need to confront, as highlighted by Deutsche Bank recently.

The US Dollar Index, which gauges the dollar against other major currencies, has dipped below 100, marking a significant setback. Experts like Adam Turnquist from LPL Financial consider this a potentially alarming development that could raise doubts about the US economy's stability.

Foreign investors are pulling out from dollar-based US assets due to uncertainties surrounding tariffs, as well as unsettling market movements in stocks and bonds. This shift in demand underscores a growing reconsideration by countries regarding their reliance on the greenback, posing potential risks to the US economy's durability, according to George Saravelos.

Deutsche Bank's global head of FX research attributed the dollar's dominance as a reserve currency to the US's ability to maintain high debt levels sustainably, supporting robust economic growth. However, if the greenback's appeal diminishes, the US's freedom to engage in expansive fiscal policies could be curtailed, affecting economic growth prospects. Saravelos emphasized the necessity for the US to adopt advantageous economic strategies and foster harmonious relationships with other nations to secure funding in the evolving financial landscape.