The dollar's global dominance is being challenged

The dollar index fell to its weakest level since June 2018 on Monday, accelerating a slide that has put it on pace for its worst month in nearly a decade. The greenback's value against global currencies has declined by 6.4% over the last three months.

What's happening: The dollar's weakness is a reflection of the market's disillusionment with the U.S., investors say, as the Trump administration's response to the coronavirus pandemic has left much to be desired.

• The European Union's coordinated fiscal policy response, by comparison, has boosted the euro to its highest against the greenback since 2018 and has investors expecting more losses for the dollar and gains for the euro.

What we're hearing: The dollar's dominance "is being challenged by the visuals witnessed around the globe: On top of a pandemic, the country seems to be politically unstable," Juan Perez, senior FX trader and strategist at Tempus, tells Axios, also noting the growing "Cold War" with China.

• "Stocks are about the only positive thing that is presented to the world from here. Faith in our overall global leadership has been shaken and it’s not policy, but evidential death tolls that keep rising from a contagion others have managed to minimize to various degrees."

What's next: Bloomberg reports that asset managers have jettisoned net long positions on the dollar and taken bearish positions "as U.S. exceptionalism wanes."

• The euro has risen 10 of the past 11 sessions, notes Marc Chandler, chief market strategist at Bannockburn Global Forex, and looks to be picking up steam as the dollar is sold against more currencies and by more investors.

Flashback: Yale University senior fellow and former Morgan Stanley Asia chairman Stephen Roach predicted earlier this year that the dollar would fall by 35% against global peers.