The US dollar’s outlook is complicated. Here’s what to know about the currency’s standing on the world stage.

Good morning to everyone, especially to basketball fans on the east coast. I’m Phil Rosen — it’s hard to keep up with the NBA playoffs here in New York with games running past midnight every night this week.

For readers who, like myself, sit in the center of the Venn diagram between sports fandom and financial news, here’s Insider’s handy guide on how to stream every NBA game online.

Now let’s get to the news — and why debates over the dollar’s dominance have recently come to a head.

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1. There are two ways to think about the role of the US dollar on the world stage, and they often get clumped together in talks about the currency’s influence.

A Monday research note from Eurizon said the dollar’s hegemony should be gauged across these dimensions:

• It’s role as a reserve currency of choice for global central banks

• It’s use as the primary currency in international trade

As far as the greenback’s status in international trade, Eurizon strategists said there’s little that will change its position there.

No other currency, such as China’s yuan or Japan’s yen, can challenge the dollar’s prevalence in international markets, similar to how English is the dominant language for global business exchange.

The CEO of Commonwealth Financial, Brad McMillan, echoed that view, writing in a recent note that fears of the dollar being replaced are overblown.

Citing data from the Bank for International Settlements, Eurizon noted that the dollar commanded 85% of all currency turnover in 2010, and that moved to 88% last year.

The dollar’s position as a top reserve currency, however, may be somewhat less certain.

In 2003, the dollar accounted for about two-thirds of global reserves. That gradually fell to 55% in 2021, but then saw a sharp decline to 47% in 2022.

“This 8% decline in one year is exceptional, equivalent to 10 times the average annual pace of erosion in the USD’s market share in the prior years,” the Eurizon strategists said.

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They pointed to Russia’s invasion of Ukraine as a catalyst for the currency’s drop-off as a reserve currency. “Exceptional actions,” such as sanctions on Russia, analysts said, made other countries less willing to hold onto the dollar.

“We believe the erosion of the dollar’s reserve currency status has accelerated in recent years at an alarming pace,” Eurizon said.

Here’s the takeaway forecasters seem to agree on: The dollar’s losing some ground as a global reserve currency, but none at all as far as international trade.

What’s your outlook for the dollar’s role on the world stage in 2023 and beyond? Tweet me (@philrosenn) or email me ([email protected]) to let me know.

In other news:

2. US stock futures rise early Tuesday, as investors continue to watch the rollout of corporate earnings and mull the possibility of further policy tightening by the Federal Reserve. Here are the latest market moves.

3. Earnings on deck: Bank of America, Goldman Sachs, and Bank of New York Mellon, all reporting.

4. Bank of America is expecting big cuts to earnings estimates. But that doesn’t mean there aren’t any opportunities left in the market. Analysts said these 10 companies have strong odds of rallying through earnings.

5. Price discounts for new homes on the market are drying up as demand comes back. The share of builders reducing prices was 30% in April, down from 36% in November, NAHB data shows. The pattern is a sign that suggests confidence in future home-buying activity is returning. 

6. The IMF forecasted that China will be the biggest growth driver for the global economy these next five years. The US, meanwhile, is going to add half of China’s contribution to the world’s GDP.

7. It’s time to exit the stock rally since the S&P 500 could tumble about 22%, according to the chief market strategist at FS Investments. The benchmark index has climbed 8% so far this year — but Troy Gayeski sees those gains as a golden opportunity to de-risk. 

8. A part-time real estate investor who’s financially independent shared how he maximizes cash flow. He said he doesn’t worry about core payments and bills thanks to his rental income — and explained the three strategies that allow him to pull in big profits every month.

9. This batch of 20 stocks are expected to outperform the market. A fintech company that tracks what Wall Street analysts are picking used its data to put together a list of 20 names that could see massive surges — including one stock that could jump 2,637%.

10. Alphabet stock tumbled on Monday on reports that Samsung is considering Bing as a replacement for Google on its phones. Google’s parent company shed more than $55 billion in market value in one day. Get the details on how competition is heating up in the search-engine sector.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email [email protected].

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.

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