By George Saravelos, Deutsche Bank chief global FX strategist
A 'nuclear' button for the dollar
America’s use of tariffs to further its geopolitical and economic goals continues to dominate the headlines in 2025. However, US leverage over the global financial system far outweighs that of trade. As if to emphasize this point, a Reuters article this week reported that European policymakers are questioning if the Fed would be willing and able to provide dollar liquidity at times of financial stress. In this report, we analyze the Fed's status as the international lender of last resort. We discuss the huge importance of the Fed’s dollar swap lines in global financial stability and discuss what may happen if dollar availability was to come into question.
