The US dollar is on track for its worst year in modern history and may not be done falling yet. The greenback is down more than 7% this year and Morgan Stanley predicts it could fall another 10%. A weaker dollar could make US exports more competitive, boosting Trump’s plan to rebalance US trade, but makes imports more expensive, adding to the sting of tariffs.
The question ahead is whether the dollar doesn’t just lose its value, but its role at the center of the global financial system. So far, there are few alternatives. And efforts to de-dollarize — central banks shifting into gold, China shoveling its currency into developing nations through swap lines — haven’t meaningfully shifted the picture. But as political economist Ngaire Woods wrote for Semafor in an essay earlier this year, “they haven’t dethroned the dollar, but that’s because the US government has protected it through sound policy and global engagement.”
Food for thought: The year that came closest to 2025 in dollar depreciation was 1973, and the result was then-President Richard Nixon taking the US off the gold standard. “Big moves in the dollar tend to create moments of instability,” Morgan Stanley’s Wilson said.
Source: Federal Reserve Bank of St. Louis
Tool: Datawrapper
This is crazy. Anyone have any ideas what happened in late January that started this downward trend? I can’t think of anything.
I’m having trouble fighting the conspiracy theory I have that this is all aimed at making the already staggering wealth disparity basically so bad that it restructures American society. Make things more expensive and make the dollar worth less so the people that are so rich the numbers don’t even matter any more are able to further consolidate, interfere with the democratic process, and completely control the media narrative, while also getting a whole new generation of poorly educated and destitute workers.
Then you expand iron fist immigration policy to American citizens so people are afraid of being kicked out, creating a prison state / nationwide factory town where people are worse off than in other first world countries but are terrified at the thought of being excommunicated from the Holy American Empire.
Edit: This would all feel like an insane ramble 10 years ago but then I read that Trump is looking to make an immigration exception for hospitality and farm illegal immigrants, making them pay taxes without being citizens and basically handing their visas to their employers. A crystal clear example of literally funneling money from the bottom earners to the top. In that model the farm gets cheap labor but the labor never is able to escape.
At that point it doesn’t feel insane to think in 50 years citizenship might feel a lot like healthcare. It’s tied up with your work and the longer you don’t work, the more being deported or imprisoned hangs over your head.
My future kids are gonna love the shiny new factory jobs!
That’s the plan. Trumpcoin will be the currency by 2026.
Just wait until the 1BBB is passed
Anyone else tired of all the winning yet?
We are going to win so much you’re going to get tired of winning. -Trump (paraphrasing since he talks like a 4 year old)
ELI5: if I’m an American that is paid in USD, makes all my purchases in USD, and never has to exchange money to another currency for any reason, what is the impact of a weakening dollar?
We’re unironically witnessing the fall of the USA as a Superpower and going back to Great Power stage, the future probably holds Europe, China, the USA and maybe India splitting the world among their spheres
And the billionaires / trillionaires don’t really care. Why would they? It’s like a quarter dropping out of your pocket when you open the car door. Oh no! I lost a quarter! But you still have a wallet stuffed with several hundred dollar bills, And you just pulled up in a Lamborghini
Bad news if you’re an American tourist abroad, but great news if you’re trying to raise international capital for investment in the United States
It’s exactly what people voted for. The worse your currency is the greater your export power, the more opportunities there can be for low skill workers.
I would like to see this on a 5 year graph.
Don’t worry our leadership is playing 4 dimensional chess!
To be clear: A strong or weak dollar isn’t necessarily good or bad on its own. There’s pros & cons to both.
Primarily, a strong dollar makes foreign imports cheaper for us, and exports more expensive. It also means that American tourists can convert their dollars into a relatively large amount of the local currency. A weak dollar makes exporting more attractive and imports more expensive. Similarly, it also means tourists abroad can’t stretch the same amount of cash as far.
Monetization of sovereign debt for unfunded wars and tax cuts for the rich. Tale as old as time.
It’s okay becauseTrump is about to get a nice tax cut today on the $80 he paid last year.
I like these charts. But I would have found it more interesting to see values adjusting for inflation. This way we do not know if one year is worse than any other because US inflation was higher or because the dollar weakened compared to the rest of the world.
Yep, looks like we’re great again.
Just the way I like it, useless.
The trickle down effect is actually happening.
We should just print more
Damn I’m getting tired of all this winning! It’s too much!
So… That whole trump will solve inflation thing… Fun how magats are now really quiet about inflation…. Almost like it was a word they never understood and were just parroting what republicuks were saying.
Wait until Trump installs his flunky at the Fed who will drop interest rates for political manipulation; you’ll see the $ drop off a cliff
Don’t worry, they’ll just blame it on the Democrats and immigrants.
Didnt see this type of doomerist rhetoric when the dollar dropped almost this far back in August 2024
This is just pure data and tells the story we all already know.
I Noticed recently that EU-imports for some US hardware is cheaper, including shipping from US, than using a local partner resellers.
Hope everyone got a break even 8% raise this year!
The plan is to devalue currency while applying protectionist policy for goods made outside of the USA.
This is why he’s up the Fed’s ass about interest rates. He wants to flood the market with cheap money to incentivize new business starts in the USA, and make it cheaper to operate here vs first world nations.
Of course, in the meantime, we import A LOT, and our dollars will go half as far as they used to… and falling.
We will have more jobs here, but we’ll be poorer because the dollar is worth less, and more tightly chained to those jobs because the social safety net has been dismantled.
It’s the fault of Hillary’s emails.
ELI5: How is the US stock market still going up?
I feel this, hard. I am currently not working full time and am using my savings in USD abroad around Europe. The value is absolute trash and falls more and more by the day.
I fucking knew knew knew that I should have converted a large chunk of it before Trump got into office, so that I’d have some at a decent conversion rate until I start making local currency. But I’m an idiot. I guess with this forecast I should change some right now.
Wow this and empty ports, empty shelves, and ww3
This is the dollar on Trump. Any questions?
I know a lot of people are benchmarking the economy as doing well because markets have stabilized or gone up a bit but there are a lot of underlying metrics that the whole house is cards is close to collapsing
I don’t know why people are surprised, devaluing the dollar is a public goal of the Trump administration.
The dollar is doing tremendous, the best ever in history, all thanks to me FDT
They are deliberately killing the value of the dollar because in theory it will make American exports cheaper for other countries to buy. Trump is fixated on a very outdated version of economics that only considers the trade of hard goods and that in order for one side to “win” trade the other has to lose. And lowering the value of the dollar makes American products more competitive because we’re on more even footing with poorer countries. So we’re all becoming poorer, less able to buy foreign goods, because of this deliberate strategy.
I’ll believe it when tRump says so /s
Almost like inflation is real.
Of course, the year I’m leaving the US for a postgraduate program in Europe is the year the dollar crashes
Anakin & Padmè meme:
The dollar is very weak right now.
At least all our imported goods will be cheaper and foreign tourists will be more likely to travel here this summer.
…..
All our imported goods will be cheaper, and foreign tourists will be more likely to travel here, right?
Jobs are down and the dollar is falling. Kinda a big deal for the US is that the dollar is the global reserve trade currency and I don’t think the falling cost helps. Mike Johnson just got up there and bold faced lied in Congress touting all these economic wins and reality does not seem to be matching the rhetoric.
![[OC] The US dollar is on track for its worst year in modern history](https://www.europesays.com/wp-content/uploads/2025/07/yz4f6qx5joaf1-1920x1024.png)
48 comments
From Liz Hoffman in the [Semafor Business](https://www.semafor.com/article/07/03/2025/the-us-dollar-is-on-track-for-its-worst-year-in-modern-history?utm_campaign=semaforreddit) newsletter:
The US dollar is on track for its worst year in modern history and may not be done falling yet. The greenback is down more than 7% this year and Morgan Stanley predicts it could fall another 10%. A weaker dollar could make US exports more competitive, boosting Trump’s plan to rebalance US trade, but makes imports more expensive, adding to the sting of tariffs.
The question ahead is whether the dollar doesn’t just lose its value, but its role at the center of the global financial system. So far, there are few alternatives. And efforts to de-dollarize — central banks shifting into gold, China shoveling its currency into developing nations through swap lines — haven’t meaningfully shifted the picture. But as political economist Ngaire Woods wrote for Semafor in an essay earlier this year, “they haven’t dethroned the dollar, but that’s because the US government has protected it through sound policy and global engagement.”
Food for thought: The year that came closest to 2025 in dollar depreciation was 1973, and the result was then-President Richard Nixon taking the US off the gold standard. “Big moves in the dollar tend to create moments of instability,” Morgan Stanley’s Wilson said.
Source: Federal Reserve Bank of St. Louis
Tool: Datawrapper
This is crazy. Anyone have any ideas what happened in late January that started this downward trend? I can’t think of anything.
I’m having trouble fighting the conspiracy theory I have that this is all aimed at making the already staggering wealth disparity basically so bad that it restructures American society. Make things more expensive and make the dollar worth less so the people that are so rich the numbers don’t even matter any more are able to further consolidate, interfere with the democratic process, and completely control the media narrative, while also getting a whole new generation of poorly educated and destitute workers.
Then you expand iron fist immigration policy to American citizens so people are afraid of being kicked out, creating a prison state / nationwide factory town where people are worse off than in other first world countries but are terrified at the thought of being excommunicated from the Holy American Empire.
Edit: This would all feel like an insane ramble 10 years ago but then I read that Trump is looking to make an immigration exception for hospitality and farm illegal immigrants, making them pay taxes without being citizens and basically handing their visas to their employers. A crystal clear example of literally funneling money from the bottom earners to the top. In that model the farm gets cheap labor but the labor never is able to escape.
At that point it doesn’t feel insane to think in 50 years citizenship might feel a lot like healthcare. It’s tied up with your work and the longer you don’t work, the more being deported or imprisoned hangs over your head.
My future kids are gonna love the shiny new factory jobs!
That’s the plan. Trumpcoin will be the currency by 2026.
Just wait until the 1BBB is passed
Anyone else tired of all the winning yet?
We are going to win so much you’re going to get tired of winning. -Trump (paraphrasing since he talks like a 4 year old)
ELI5: if I’m an American that is paid in USD, makes all my purchases in USD, and never has to exchange money to another currency for any reason, what is the impact of a weakening dollar?
We’re unironically witnessing the fall of the USA as a Superpower and going back to Great Power stage, the future probably holds Europe, China, the USA and maybe India splitting the world among their spheres
And the billionaires / trillionaires don’t really care. Why would they? It’s like a quarter dropping out of your pocket when you open the car door. Oh no! I lost a quarter! But you still have a wallet stuffed with several hundred dollar bills, And you just pulled up in a Lamborghini
Bad news if you’re an American tourist abroad, but great news if you’re trying to raise international capital for investment in the United States
It’s exactly what people voted for. The worse your currency is the greater your export power, the more opportunities there can be for low skill workers.
I would like to see this on a 5 year graph.
Don’t worry our leadership is playing 4 dimensional chess!
To be clear: A strong or weak dollar isn’t necessarily good or bad on its own. There’s pros & cons to both.
Primarily, a strong dollar makes foreign imports cheaper for us, and exports more expensive. It also means that American tourists can convert their dollars into a relatively large amount of the local currency. A weak dollar makes exporting more attractive and imports more expensive. Similarly, it also means tourists abroad can’t stretch the same amount of cash as far.
Monetization of sovereign debt for unfunded wars and tax cuts for the rich. Tale as old as time.
It’s okay becauseTrump is about to get a nice tax cut today on the $80 he paid last year.
I like these charts. But I would have found it more interesting to see values adjusting for inflation. This way we do not know if one year is worse than any other because US inflation was higher or because the dollar weakened compared to the rest of the world.
Yep, looks like we’re great again.
Just the way I like it, useless.
The trickle down effect is actually happening.
We should just print more
Damn I’m getting tired of all this winning! It’s too much!
So… That whole trump will solve inflation thing… Fun how magats are now really quiet about inflation…. Almost like it was a word they never understood and were just parroting what republicuks were saying.
Wait until Trump installs his flunky at the Fed who will drop interest rates for political manipulation; you’ll see the $ drop off a cliff
Don’t worry, they’ll just blame it on the Democrats and immigrants.
Didnt see this type of doomerist rhetoric when the dollar dropped almost this far back in August 2024
This is just pure data and tells the story we all already know.
I Noticed recently that EU-imports for some US hardware is cheaper, including shipping from US, than using a local partner resellers.
Hope everyone got a break even 8% raise this year!
The plan is to devalue currency while applying protectionist policy for goods made outside of the USA.
This is why he’s up the Fed’s ass about interest rates. He wants to flood the market with cheap money to incentivize new business starts in the USA, and make it cheaper to operate here vs first world nations.
Of course, in the meantime, we import A LOT, and our dollars will go half as far as they used to… and falling.
We will have more jobs here, but we’ll be poorer because the dollar is worth less, and more tightly chained to those jobs because the social safety net has been dismantled.
It’s the fault of Hillary’s emails.
ELI5: How is the US stock market still going up?
I feel this, hard. I am currently not working full time and am using my savings in USD abroad around Europe. The value is absolute trash and falls more and more by the day.
I fucking knew knew knew that I should have converted a large chunk of it before Trump got into office, so that I’d have some at a decent conversion rate until I start making local currency. But I’m an idiot. I guess with this forecast I should change some right now.
Wow this and empty ports, empty shelves, and ww3
This is the dollar on Trump. Any questions?
I know a lot of people are benchmarking the economy as doing well because markets have stabilized or gone up a bit but there are a lot of underlying metrics that the whole house is cards is close to collapsing
I don’t know why people are surprised, devaluing the dollar is a public goal of the Trump administration.
The dollar is doing tremendous, the best ever in history, all thanks to me FDT
They are deliberately killing the value of the dollar because in theory it will make American exports cheaper for other countries to buy. Trump is fixated on a very outdated version of economics that only considers the trade of hard goods and that in order for one side to “win” trade the other has to lose. And lowering the value of the dollar makes American products more competitive because we’re on more even footing with poorer countries. So we’re all becoming poorer, less able to buy foreign goods, because of this deliberate strategy.
I’ll believe it when tRump says so /s
Almost like inflation is real.
Of course, the year I’m leaving the US for a postgraduate program in Europe is the year the dollar crashes
Anakin & Padmè meme:
The dollar is very weak right now.
At least all our imported goods will be cheaper and foreign tourists will be more likely to travel here this summer.
…..
All our imported goods will be cheaper, and foreign tourists will be more likely to travel here, right?
Jobs are down and the dollar is falling. Kinda a big deal for the US is that the dollar is the global reserve trade currency and I don’t think the falling cost helps. Mike Johnson just got up there and bold faced lied in Congress touting all these economic wins and reality does not seem to be matching the rhetoric.
So this is what making America great looks like.
Slow clap… wonder who we have to thank for this…
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