Is the U.S. dollar no longer reliable? Canada’s pension funds eye three alternatives.

(Toronto, Jan 30)
As the U.S. dollar’s safe-haven status shows signs of weakening, the Investment Management Corporation of Ontario (IMCO) said in its annual Worldview report that it is increasingly viewing the Swiss franc, the Japanese yen, and gold as potential alternatives to the dollar.

IMCO manages roughly C$86 billion in assets on behalf of Ontario’s public-sector and government-related institutions. The report argues that since U.S. President Donald Trump announced broad-based tariffs last year, the dollar has continued to soften even as U.S. Treasury yields have risen—an unusual combination that suggests investors no longer see the dollar as the only safe-haven asset and may even question whether the United States remains a stable long-term partner.

IMCO added that Trump’s unpredictable and unconventional policy approach, combined with U.S. efforts to address global imbalances at a faster pace, could push inflation and interest rates higher over the next few years—creating sustained downside pressure on the dollar.

Focus on strategic real assets

Beyond identifying alternative currencies, IMCO also urged investors to pay closer attention to strategically important real assets—such as artificial intelligence (AI) infrastructure and energy-related facilities—as a way to diversify macroeconomic risk.

In practice, some Nordic pension funds have already moved ahead with “de-dollarization.” Denmark’s AkademikerPension and Sweden’s Alecta have recently sold, or said they plan to sell, most of their U.S. Treasury holdings, citing concerns over weakening U.S. fiscal discipline, a softer dollar, and broader macro uncertainties including the Greenland situation. Trump’s earlier remarks indicating little concern about a falling dollar—along with criticism of China and Japan for allegedly weakening their currencies—have further reinforced market expectations of longer-term dollar depreciation.