The dollar is at risk of losing its traditional status as a safe haven for global investors following a tariff backlash, a European banking giant has warned.

German-based Deutsche Bank said: “This needs to be acknowledged as a possibility” after the speed and scale of geopolitical uncertainty accelerated the dollar’s turmoil.

The concerns were shared in a note to clients by the bank’s global head of FX strategy George Saravelos, first reported by Bloomberg.

The note said: “It is hard to over-estimate the scale of change taking place in global economic and geopolitical relations in a matter of days.”

US stock market Dow Jones opened on a lull on Tuesday, losing as much as 664 points and continuing from Monday’s slump. 

This followed confirmation that President Trump’s 25 per cent tariffs on goods from Mexico and Canada had come into effect.

A further 10 per cent was slapped onto Chinese products, ballooning China’s total import tax to 20 per cent.

Dollar not strengthening materially

A broad measure of the dollar fell as much as 0.7 per cent as the fallout from tariffs set in. 

Saravelos said a stand out from the market’s response was the dollar “not strengthening materially”.