According to The Washington Post, President Donald Trump's erratic approach to domestic and foreign policy continues to negatively impact the dollar's exchange rate. Since his return to the White House in January 2025, the American currency has lost over 10% of its value.
Economist Robin Brooks, a senior fellow at the Brookings Institution, predicts that the dollar's decline will continue. "I believe the dollar could fall another 10% this year," he stated.
He also added that investors are experiencing an "instinctive aversion" to political instability. Brooks previously worked at the International Monetary Fund.
According to the publication, several factors are influencing the dollar's exchange rate. After a prolonged rise in US financial markets, many foreign investors have begun to reassess their investment strategies, reducing their dependence on the American economy and shifting to other countries.
Additionally, the situation with the dollar is negatively affected by the high level of national debt and persistent budget deficits, which remain relevant even with low unemployment rates.
However, the newspaper believes that the main factor contributing to the dollar's weakening is the "ripple effect" of the unpredictable policies of the Trump administration. This includes abrupt personnel decisions and sudden reversals of previously adopted measures regarding import tariffs and the use of military force. In such an environment of uncertainty, many foreign investors find themselves in a state of constant stress.
One indirect indication of declining confidence in the dollar is the significant rise in gold prices, which have increased by nearly 80% over the past year.
