Speaking at an IIF conference overnight, ECB Chief Economist Philip Lane downplayed concerns over recent portfolio shifts away from US Dollar assets, suggesting the move may reflect a normalization rather than a structural retreat.
Lane noted that allocations are likely moving from an overweight position in Dollar-denominated assets toward a more balanced distribution among global currencies.
He pointed out that US assets had been “priced to perfection” following US President Donald Trump’s election last year, making some degree of reallocation expected as valuations adjust.
Lane also addressed recent outflows from U.S. Treasuries, framing them as part of this rebalancing process. “It can either settle down or invite a deeper rethink,” he said, leaving the door open to further shifts depending on global investor sentiment.
However, he admitted that despite the near-term adjustments, Dollar is still expected to far outweigh Euro in most global portfolios.
