(20 June 2025 – United States) Suppliers to US importers are increasingly requesting settlement in EUR, RMB, CAD or MXN home currencies and no longer desire to be invoiced in US Dollars (USD), US Bancorp reports.
Foreign counterparties are seeking to limit their exposure to heightened USD volatility stemming from the US-China trade war and tariff settings after the greenback depreciated eight percent against a basket of other currencies in 2025 year-to-date.
That decline followed a sharp appreciation of seven percent in Q4 2024 as the higher level of volatility complicates FX risk management decision making and results in sizeable earnings risks, leading to the greenback becoming less favourable as a primary invoicing currency.
Across North America and Latin America (LATAM), the greenback accounted for veritably all export invoices on average each year from 1999 to 2019 according to the latest data from the International Monetary Fund (IMF) and the Federal Reserve Bank of New York. In the Asia Pacific (APAC) region, that figure stood at 75 percent. In Europe, where intra-bloc trade prevails, the USD represents a significantly smaller share of exports denominated in USD compared to the Euro.
“A lot of clients previously were reluctant because dollars were sacred in the eyes of the supplier. Now the vibe from overseas vendors seems to be, ‘Just give us our currency’. While it remains to be seen if and when the shift manifests itself in official data, overseas vendors wanting to transact in local currencies could speak to the dollar’s reputation” US Bank Head of Currency Sales, Paula Comings commented to Bloomberg.
“We think it will take further trade blocs across LATAM and APAC to emerge to see larger shifts away from the dollar in trade invoicing, possibly encouraged by the US trade war” stated Citi FX Strategists Dirk Willer and Adam Pickett in a recent note.