Jason Lau, Managing Director of KCM Trade Australia, was recently featured in an exclusive interview on SBS Radio’s “Global Finance”. Referencing recent market reports from leading institutions such as Morgan Stanley and Goldman Sachs, Jason offered a comprehensive analysis of the US dollar’s long-term depreciation, the structural implications of President Donald Trump’s tariff policy, and the resulting strategic opportunities in non-dollar currencies and emerging markets.
Forecasting US Dollar Depreciation: Emerging Consensus and Five Key Drivers
Q: Leading financial institutions such as Morgan Stanley have forecasted a potential 9% decline in the US Dollar Index by 2026. How do you assess this projection, and what are the key factors driving the dollar’s current weakness?
Jason pointed out that the US Dollar Index has declined by 8.5% year-to-date, driven by a convergence of multiple forces:
The strong US dollar over the past decade was largely attributed to superior returns on dollar-denominated assets—particularly in comparison to the EU and Japan. However, stretched equity valuations in the US, combined with the resurgence of tariff policies, have weakened the appeal of dollar assets. As a result, a weaker dollar has become a prevailing market consensus.
Trump’s Policy Legacy: The “Weak Dollar Strategy” and the Risks of a New Plaza Accord
Q: Was the Trump administration deliberately pursuing a weak dollar policy? What are the long-term implications of the proposed “Mar-a-Lago Accord”?
Jason explained that the so-called “Mar-a-Lago Accord” refers to a proposed multilateral initiative aimed at coordinated currency intervention to weaken the US dollar, boost American export competitiveness and reduce trade deficits—echoing the 1985 Plaza Accord between the US, Japan, and Germany. In addition, the accord reportedly includes plans to restructure U.S. debt by swapping portions of traditional Treasuries for unconventional perpetual bonds.
If such an agreement were to be implemented, it could disrupt the long-standing perception of U.S. Treasuries as "risk-free assets." This shift may trigger a black swan event, potentially leading to a large-scale sell-off of the U.S. dollar and a sharp decline in its market value.
A Changing Currency Landscape: Euro and Yen Outperform as Safe Havens Reassert
Q: What impact does US dollar depreciation have on other major currencies such as the euro, pound sterling, and Japanese yen? Which currencies are likely to benefit most? What should traders holding Hong Kong or Australian dollars consider in this environment?
Jason noted that the Swiss franc and euro have outperformed significantly, with year-to-date gains of +10% each. The Japanese yen has risen by +8.85%, the pound sterling by +7.7%, and the Australian dollar by +5.13%.
In the face of the ongoing trade war, the global economic landscape may undergo a significant reshuffle. Investors must adopt a more international perspective in order to navigate an increasingly diverse and complex market environment with stability.
Expert Insight into Global Financial Dynamics
With more than 15 years of experience in banking and finance across the Asia-Pacific region, Jason Lau has earned a distinguished reputation in the industry. He and KCM Trade remain committed to market research and trader education—continuously contributing to the development of financial literacy and strategic insight across the trading community.
About SBS Radio
The Special Broadcasting Service (SBS) is Australia’s foremost multicultural public broadcasting platform, known for its high-quality content in news and finance. Its radio division delivers multilingual programmes across both traditional and digital channels, reaching a diverse and informed audience. Its finance segments are widely recognised for their professional depth and global perspective.
As a regular contributor to SBS, Jason Lau continues to share expert-level market commentary, supporting the public’s financial awareness. His analysis and educational efforts provide a dual foundation—empowering investors while strengthening the broader financial ecosystem.
KCM Trade encourages audiences to tune in to the latest episode:
“US Dollar Devaluation – Is a 9% Drop by 2026 Intentional or Inevitable?” | SBS Chinese
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