Overview

• The US dollar has fallen roughly 12 percent against the euro since the start of 2025, data from the European Central Bank show.
• Higher dollar prices are eroding Bavaria’s competitiveness in its biggest US export sectors, notably automobiles and machinery.
• Many companies are only now unwinding currency hedges, so the full impact of the slide is not yet visible in trade figures.
• Currencies pegged to the dollar have also weakened, broadening competitiveness challenges for exporters in Asia and beyond.
• Financial markets anticipate further dollar softness as investors grow wary of US fiscal stability under President Trump.