Dollar dominance is waning, and the prelude to a new wave of capital migration has already begun.

Let's look at the most straightforward evidence—The Federal Reserve on December 10th took aggressive action, implementing the third rate cut of the year, pushing interest rates to 3.50%-3.75%. This is not just a numerical change, but a shift in monetary policy from tightening to genuine easing. More painfully, the dollar index has fallen over 10% this year, a decline unseen since 1973. And the exchange rate threshold of "7" is now clearly presenting this major transformation.

As investors, rather than fixating on the exchange rate every day, it's better to think through a more fundamental question—will the economy actually enter a recession? The answer to this determines where your money should go.

**The halo of the dollar is cracking**

Once invincible, the dollar is now experiencing a historic loss of luster. The rare "triple kill" of stocks, bonds, and currencies in April 2025 directly shattered the illusion of the dollar assets as a "safe haven." What’s behind this? The US government has overdrawn its credit too aggressively over the years. Federal debt has exploded to $38 trillion, with interest payments alone consuming 18% of fiscal revenue annually. This is not a healthy economic system.

Central banks around the world have long seen through this. The data is clear—by the second quarter of 2025, the dollar's share in foreign exchange reserves has dropped to only 56.32%, below the 60% red line for 11 consecutive quarters, a situation unseen in 30 years. This is no coincidence; it’s a global central bank vote of no confidence. The collapse of faith in the dollar fundamentally reflects a reevaluation of its macro fundamentals, fiscal discipline, and institutional credibility.