The dumping of US assets in favour of Europe’s resurgent markets signals the start of a much longer-term move by pension funds and other big institutional money managers to cut back their huge exposure to dollar investments, say investors.

Wall Street banks say they are seeing signs that investors managing trillions of dollars of assets are starting to trim their US positions, on concerns over erratic policymaking, President Donald Trump’s attacks on the Federal Reserve chair and the fallout from the trade war.

Although US stocks have almost recovered their losses since Trump’s so-called “l(fā)iberation day” tariff announcements rocked global markets last month, they remain in negative territory this year and behind global peers. The dollar is down more than 7 per cent this year, with some investors pointing to “capital flight” from the US to other assets such as German government debt.