economy
January 28, 2026
The dollar could have further to fall as its decline creates a 'double-edged sword' for America
The U.S. dollar fell on Tuesday after President Donald Trump insisted the currency — which declined notably last year — is doing "great."
TL;DR
- The U.S. dollar is officially in a bear market, with its index having fallen 2.2% this year and over 9% in 2025.
- President Trump views a weaker dollar as beneficial for international trade, stating it allows for higher profits.
- A weaker dollar makes U.S. exports more competitive but can lead to pricier imports and a loss of investor confidence.
- Economists describe the dollar's decline as a "double-edged sword" impacting export competitiveness and market confidence.
- The U.S. economy exhibits a K-shaped pattern, with the top 20% of earners driving spending while lower-income consumers struggle with inflation.
- Experts predict the dollar sell-off may continue due to capital seeking better returns globally and the dollar trading at a rich premium.
- Factors like strong global risk sentiment, rising commodity prices, and geopolitical events are contributing to the dollar's decline.
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