New Delhi [India], July 26 : With geopolitical uncertainty on the rise and the American economy grappling with policy paralysis and sluggish growth, global capital is increasingly flowing toward Europe and Asia, according to a recent report from Swiss private banking and financial services firm Julius Baer.
According to the report, Governments in these regions are seizing the opportunity by enacting pro-growth fiscal and monetary policies that attract investor interest.
The US's reputation as a safe haven is waning due to its unstable domestic politics and limited ability to manage its finances.
Additionally, the companies remain cautious, delaying investments and hiring, while the Federal Reserve is expected to implement modest rate cutstoo little, too late to reignite robust growth.
Meanwhile, the US dollar, once a reliable refuge during times of stress, is showing signs of structural vulnerability. Investors are now turning to alternative safe-haven currencies, such as the Swiss franc, and are increasingly managing their currency exposure more actively, according to the report.
As a result, Europe and Asia are taking the centre stage. European nations, having rebuilt fiscal discipline, are now poised to deploy stimulus, reduce regulatory burdens, and foster business-friendly environments. Furthermore, the European Central Bank is expected to initiate a cycle of rate cuts, amplifying the region's attractiveness to capital.
Asia, and especially China and Japan, is navigating trade volatility through internal reforms and supportive domestic policy. China is bolstering shareholder returns through cost control and buybacks, while Japan continues to push for structural reforms and maintains ultra-accommodative monetary policy.
The report further reveals that, investors are increasingly advised to pivot away from US-centric portfolios and embrace a diversified, non-USD approach. Gold remains a key hedge against both inflation and geopolitical risk, while selected emerging market corporate bonds and quality European equities offer compelling value.
Overall, the decline of US exceptionalism may be unsettling, but it also opens new aspects for global investors.
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