Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Trump wants a weaker dollar but economists aren’t so sure – Full Analysis.
The value of the U.S. dollar has been on a steady decline, but one person who doesn’t seem worried is President Donald Trump. On the contrary, Trump has been lauding the dollar’s fall as a positive thing for the U.S. economy. “I think it’s great,” Trump told reporters when asked about the slumping dollar last week. Trump has repeatedly stated that a declining dollar is good for U.S. businesses. But with the dollar recently hitting a value of 95.56, a four-year low, some economists are sounding warning bells.
‘Interferes with his priorities’
A weaker dollar could provide “near-term benefits to the U.S. economy,” as a “lower currency also boosts exports, without the uncertainty and distortions that tariffs entail,” said the Journal. This occurs even as the weakening currency, combined with Trump’s sweeping tariffs, can “both discourage imports.” Historically, Trump has also felt that the “dollar appreciated when the U.S. economy outperformed.”
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Some seem to be fine with this economic stance, as trading floors are “abuzz with talk of the ‘debasement trade,’ a broad term for bets on the deterioration of American financial exceptionalism,” said The Economist. Another reason some economists aren’t panicking is that the “dollar is not actually all that weak,” as its real exchange rate (which accounts for inflation discrepancies between countries) was “13% above its average of the past 30 years” in 2025.
‘Signifies diminished confidence’
Trump may not have a problem with a weakened dollar, but most economists feel differently. A “weak dollar is not the weather, it’s the barometer,” said Steve Englander, a researcher at British bank Standard Chartered, to CNBC. A weaker currency “reflects the fact that something’s going wrong, either domestically or internationally, and the currency weakness is sort of an escape valve.” Having a weak dollar also “signifies diminished confidence in the U.S. as foreign investors grow wary over the country’s fiscal outlook,” said CNBC.
Since the dollar has been doing well for a long time, many people might be “unable to process the scenario of a weakening dollar and a strong U.S. economy,” said Stephen Jen, founder of asset management group Eurizon SLJ Capital, to Bloomberg. If the dollar’s slide continues, it could mark the “beginning of the next leg lower in the dollar, and many may not be prepared for it.”
And the dollar’s fall has largely been Trump’s own doing, as it has been “driven, in part, by concerns about Trump’s unpredictable — and often unorthodox — approach to economic policy,” said NPR. Having a weaker dollar can also make items overseas more expensive, a “major issue given that the U.S. has traditionally imported more from abroad than it exports.” As the dollar continues to drop, alternative assets like gold are “outperforming as a safe-haven for investors,” said Fortune; gold is up nearly 8% year to date.
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