In this episode of Making Sense, Gareth Edwards and Francis Herd walk through three connected forces shaping markets right now: Trump’s policy signals, the dollar’s strength (or weakness), and the world’s growing interest in alternatives to dollar dominance.
The episode starts with a simple observation: currency and commodity markets can swing fast when policy uncertainty rises. They discuss how a weaker US dollar can translate into a stronger rand and how gold can spike when investors feel uneasy. Then comes the key pivot: if Trump is pushing tariff threats and prioritising US manufacturing, is a weaker dollar part of the strategy?
Francis explains the trade-off. A strong dollar makes imports cheaper for Americans and boosts purchasing power; but it also makes US exports more expensive, hurting manufacturing competitiveness. That’s where the political promise meets the economic gamble: bring jobs back, grow at home, and accept the risk of second-order effects like inflation.
The second half tackles de-dollarization. What does it actually mean when people say countries are “leaving the dollar”? The episode explains the dollar’s role as the world’s reserve currency - central to global pricing and trade - and why some central banks have been gradually reducing dollar holdings. But it also makes a crucial point: alternatives are limited, which is why the dollar remains dominant even while confidence shifts at the edges.
If you want a crisp, conversational explainer on why Trump’s moves matter far beyond the US - and why South Africans feel it through the rand, inflation expectations, and market sentiment - this episode connects the dots.