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
napleonblwnaprt on
This is crazy. Anyone have any ideas what happened in late January that started this downward trend? I can’t think of anything.
[deleted] on
[deleted]
FloridaGatorMan on
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.
Glass_Shoulder4126 on
My future kids are gonna love the shiny new factory jobs!
megacia on
That’s the plan. Trumpcoin will be the currency by 2026.
DejSauce on
Never seen a bigger sign to buy the dip than this. Actually insane opportunity
CloudyEngineer on
Just wait until the 1BBB is passed
ThatOtherGuy254 on
I guess people here don’t realize that a weak currency is usually better than a strong one and many nations actually weaken their currency on purpose.
bareboneschicken on
A declining dollar will help boost US exports.
icyaccount on
Anyone else tired of all the winning yet?
friendly-sam on
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)
trendy_pineapple on
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?
Bossitron12 on
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
Analyst2163 on
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
aightgg on
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
BlindingDart on
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.
iwantthisnowdammit on
I would like to see this on a 5 year graph.
tedsgloriousmustache on
Don’t worry, my Republican friends at the country club are super excited about a weak dollar because of imports and exports. They did not expand on what they meant.
Also, they told me last night that tariffs are being absorbed by the companies and not passed onto consumers so our nation is getting $8b a day richer. Nothing but blue skies. Stocks are undervalued… And just wait until the Fed has to lower interest rates because inflation is so low… we’re all gonna be rich. Well, some of us.
Diamond1africa on
Yikes! Better add $2.4 T to the debt piles!
eliota1 on
Don’t worry our leadership is playing 4 dimensional chess!
InsuranceToTheRescue on
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.
MadtownV on
Monetization of sovereign debt for unfunded wars and tax cuts for the rich. Tale as old as time.
![[OC] The US dollar is on track for its worst year in modern history](https://www.byteseu.com/wp-content/uploads/2025/07/yz4f6qx5joaf1-1536x1360.png "[OC] The US dollar is on track for its worst year in modern history")
23 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.
[deleted]
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.
Never seen a bigger sign to buy the dip than this. Actually insane opportunity
Just wait until the 1BBB is passed
I guess people here don’t realize that a weak currency is usually better than a strong one and many nations actually weaken their currency on purpose.
A declining dollar will help boost US exports.
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, my Republican friends at the country club are super excited about a weak dollar because of imports and exports. They did not expand on what they meant.
Also, they told me last night that tariffs are being absorbed by the companies and not passed onto consumers so our nation is getting $8b a day richer. Nothing but blue skies. Stocks are undervalued… And just wait until the Fed has to lower interest rates because inflation is so low… we’re all gonna be rich. Well, some of us.
Yikes! Better add $2.4 T to the debt piles!
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.