Domestic politics reportedly is the greatest threat to dollar’s global global reserve currency status.

CNBC, citing ratings agency Fitch, reports that proposed legislation currently being scrutinized by Congress poses a greater danger to the U.S. dollar's global status than does any competing legal tender.

“The two pieces of draft legislation in question – the Federal Reserve Transparency Act (FRTA) and the Financial Choice Act (FCA) – are both aimed at restricting the independence of the Federal Reserve (Fed) and permitting greater political oversight of monetary policy,” CNBC explained.

“Should these initiatives be passed into law, they would gradually weaken the global appetite for the dollar to remain the world's reserve currency, a position it has held since it was chosen as such as part of the Bretton Woods Agreement of 1944,” CNBC claimed.

"Investors considering dollar assets and other dollar exposures would weigh the risk of political interference in monetary policy decisions and the possibility of the Fed's remit being broadened to include congressional priorities such as indirect funding of infrastructure investment," said James McCormack, global head of sovereign ratings at Fitch, in the note published on Wednesday.

"There may also be concerns about episodes of financial sector stress being deeper and more prolonged if the Fed's policy response options were explicitly limited," he wrote, according to CNBC.

Meanwhile, the dollar is set to strengthen about 10 percent against the yen and euro as the Federal Reserve raises interest rates at least two more times this year, according to Goldman Sachs Asset Management.

Treasury 10-year yields will climb by about 50 basis points in the “medium term” as a healthy U.S. economy convinces policy makers to keep pushing rates higher, Philip Moffitt, Asia-Pacific head of fixed income at the money manager, which oversees more than $1 trillion, recently told Bloomberg.

“The U.S. is still in very good shape,” Sydney-based Moffitt said. “Our strategy is to have smaller positions based on our long-term view and try to hold on to them and then add when we think we get an opportunity.”

(Newsmax wires services contributed to this report).

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