The US dollar slid sharply yesterday against a range of currencies—notably the euro, the pound, the yen, and the Australian dollar—with the steepest drop seen versus the yuan.

Negative drivers for the dollar are accumulating. Comments from Federal Reserve officials, President Donald Trump's assertion that Kevin Warsh would deliver rapid US growth by any means, and warnings from Beijing that Chinese banks should curb Treasury issuance all reinforced the view that US assets have become less attractive than before.

Beijing's moves matter because any retreat from US sovereign debt accelerates a broader global trend toward diversification away from the dollar. Such a shift could speed capital repatriation into Chinese assets, providing a structural tailwind for the yuan. Officials in Beijing have increasingly flagged risks associated with heavy dollar concentration—and their words have been matched by deeds. Analysts estimate China has cut its holdings of US Treasuries by about 10% over the past year. That reduction adds downward pressure to Treasury demand, raises the prospect of higher yields, and erodes confidence in the dollar as a safe-haven asset.

Reserve diversification is now a strategic priority for many central banks, especially in Asia and the Middle East. Saudi Arabia and India, for example, have been boosting allocations to the yuan and to other emerging-market currencies—moves driven by geopolitics and closer trade and investment ties with China. That shift is weakening the dollar's dominance in international trade: the share of dollar-denominated oil settlements has fallen from about 80% to roughly 60% over the past decade.

Major investors and other large players are also actively reallocating assets, increasingly turning to currencies such as the euro and the pound sterling. Within the eurozone itself, officials have repeatedly warned, after the sharp Greenland dispute, that greater caution is needed in accumulating US Treasuries.

All of this opens new horizons for the yuan. Its international use is being accelerated by the digital yuan, which is already being piloted in cross-border payments. If China continues a policy of reserve repatriation, it could trigger a wave of speculative flows into CNY, pushing the currency higher versus the dollar. Risks remain, however: market volatility or a global recession could reverse the trend if investors seek safety in traditional assets.

A technical outlook for EUR/USD suggests that buyers should consider reclaiming 1.1925. That would open the way to test 1.1957. From there, a move to 1.1994 is possible, although advancing beyond that without support from major players would be difficult. The extended target is 1.2037. On a decline, meaningful buying interest is likely near 1.1890. If buyers do not appear there, it would be prudent to wait for a new low at 1.1858 or to open long positions from 1.1832.

As for GBP/USD, buyers of the pound sterling should capture the nearest resistance at 1.3698. Only that will allow them to target 1.3730, above which a breakout would be challenging. The extended target is around 1.3757. If the pair falls, bears will try to seize control at 1.3660. If they succeed, a break of that range would deal a serious blow to bullish positions and could push GBP/USD down to 1.3625 with scope to extend to 1.3585.