Overview

• The US dollar has declined roughly 10% against the euro since January, reaching its weakest exchange rate in over three years as of April 25, 2025.
• President Trump's erratic trade tariffs, including recent levies on steel, aluminum, and imports, have created market volatility and pressured the dollar's value.
• European consumers benefit from cheaper imports and lower inflation, while concerns grow over potential disruptions to the global financial system.
• Trump's public criticism of Federal Reserve Chair Jerome Powell, including calling him a 'loser,' has raised questions about the Fed's independence and added to market uncertainty.
• Despite the dollar's decline, no viable alternative reserve currency has emerged, as the eurozone lacks unified bonds and China's renminbi remains limited by restricted financial openness.