The U.S. Dollar Index fell to 96.40 on Friday, its lowest level since April 2024, after the International Monetary Fund's Composition of Official Foreign Exchange Reserves report showed the dollar's share of global central-bank reserves declined to 56.8% in Q1 2026 — the lowest reading since 1995. The data triggered renewed selling against all major currencies and ignited a fresh leg in the gold rally.
The euro climbed 1.1% to $1.1812, the Japanese yen strengthened 1.8% to 138.40, the British pound advanced 0.9% to $1.3640, and the Swiss franc surged 1.4% to 0.7980 per dollar. The yuan offshore traded at 6.94 per dollar, the strongest level since the People's Bank of China widened the trading band in 2023.
Gold Reserves Hit Record Share
The IMF data revealed that gold now accounts for approximately 18.4% of global reserves at market value, the highest share since 1990, while the Chinese renminbi crossed the 4% threshold for the first time. The euro's share rose to 21.6%, while the yen, sterling, and Canadian and Australian dollars collectively held the remaining shares.
World Gold Council data show central banks added a net 248 tons of gold in Q1 alone, on pace to exceed the record 1,082 tons purchased in 2024. Buyers were led by Poland, Turkey, India, and China — the latter resuming purchases after a six-month pause. Jurisdictions repatriating physical gold from London and New York vaults rose to 14, including Germany, Italy, and France.
Trump Comments Add Pressure
President Trump added to dollar weakness Friday, telling reporters at the White House that "the dollar is too strong and we need a competitive currency to bring manufacturing home." The comments echoed the broader Mar-a-Lago Accord framework articulated by his Council of Economic Advisers chair Stephen Miran, calling for coordinated dollar weakening alongside tariff and capital-controls policy.
Goldman Sachs strategist Kamakshya Trivedi cut his year-end DXY forecast to 92, citing the combination of Fed easing, the Mar-a-Lago framework, and continued reserve diversification. Morgan Stanley's David Adams now expects EUR/USD to reach $1.22 by year-end and USD/JPY to fall to 130. Bears warn that an over-engineered dollar weakening could spike inflation expectations and complicate the Fed's easing path.