The prestige of the U.S. dollar is being questioned as the currency weakens and competitors such as the euro and the renminbi gain strength, an investment manager told CNBC Monday.

Though the U.S. economy has been performing well and the Federal Reserve has signaled further interest rate hikes, investors have been concerned over when and how this policy will be delivered.

U.S. President Donald Trump has not given details on tax reform and infrastructure spending — two of his biggest campaign pledges. This coupled with several scandals at the White House have let markets nervous with investors ditching the dollar for other currencies.

“There is a short-term discussion of the timing of the balance sheet reduction on the one hand or the winding down of the asset purchase program on the other,” Didier Saint-George, member of the Investment Committee at Carmignac told CNBC about the next steps for the U.S. Federal Reserve.

“But I think more fundamentally you have what I touch on, which is this global thinking about currencies. If you are a global asset allocator, the status of the U.S. dollar is really being questioned. Is it necessarily the currency that justifies the same status as it has in the past years? I think strategically you can make the case that the dollar could see its status revisited downwards which would benefit the euro, probably it’s benefiting not only the euro, but also the Chinese currency,” Saint-George said.

The investment manager referenced the rise of the dollar index in 2014 when it started at around $80 and rose quickly to $90 before hitting $100 in 2015. While Saint-George doesn’t expect the dollar index to fall back to $80, he is not discounting a fall from the current $92.425 handle.

“I think the question is at these levels for the dollar index … whether it could break down indeed and start going towards the kind of levels it was before the 2014 rise,” Saint-George said.

Meanwhile, the euro was at another high on Monday. The common currency rose to a two-and-half year high against the dollar on doubts over the U.S. currency but also after European Central Bank President Mario Draghi gave two speeches last week with no indications about the bank’s next steps for monetary policy.

The positive economic data, which included the release of better-than-expected purchasing managers’ index (PMI) readings last Wednesday, and a large current account surplus in some euro zone economies, have given confidence to investors to buy euros.

However, there’s some political risk in the horizon for the euro zone. Viktor Nossek, director of research at Wisdom Tree, said that the Italian election due in 2018 could be a problem for the euro area.

“We do think that in the first quarter of next year, this could potentially be a stumbling block, because there’s very high unemployment, the Five Star Movement is neck-and-neck with the democratic party so there’s nothing to suggest that the political risk in Italy has abated,” Nossek said.

But for now, the weakness of the U.S. dollar is another headache for the European Central Bank. As the euro gets stronger against the dollar, European products become more expensive, which could impact European exports.

Market players are concerned over the euro’s recent strength, which could influence the central bank’s position. Euro strength acts as a deflationary pressure at a time when the central bank wants to bring core inflation up.

Axel Riedel, head of SPDR ETFs Germany at State Street Global Advisors, told CNBC that Draghi’s speech at the Jackson Hole meeting Friday was much more on regulation and reforms rather than on monetary policy. “Draghi doesn’t want to offend anyone in the ECB ahead of the September event,” he said.

The ECB is holding a monetary policy meeting on September 7. Markets have been hoping to hear indications on how the bank will reduce its monetary stimulus at that meeting.

The recent positive economic momentum and reduced political risk across the euro zone are putting pressure on the ECB to start exiting its quantitative easing (QE) program.

The situation isn’t easy for President Draghi who has to deal with a stronger growth, but inflation that is lower than the ECB’s target and a stronger currency.

“It’s pretty hard for Mario Draghi because exports are getting more expensive,” Riedel said. “A stronger dollar, especially in Germany with the upcoming election, puts more threat on things.”

“The dollar is threatening the European, the German companies,” he said. “It’s hard to say where we’re moving (in terms of monetary policy).”

The economic momentum in the euro area is also due to growing exports. The U.S. is the top destination for German products, according to data from the Observatory of Economic complexity.

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