"There are several reasons the dollar is down so sharply, including investors' fears about the United States' economic policies under Trump. And there are certainly benefits to a weaker dollar including to domestic manufacturers. When the value of the dollar drops, American exports can become a little less expensive for buyers in other countries, hence making them more attractive. But there's a flip side: A weaker dollar means that goods imported into the U.S. from abroad can become more expensive."
"The dollar's value has fallen about 2% so far this year after already tumbling by nearly 10% last year the biggest annual decline since 2017. This decline has been driven, in part, by concerns about Trump's unpredictable and often unorthodox approach to economic policy, especially his use of tariffs against a slew of countries, as well as his frequent attacks against the Federal Reserve. That has led to concerns that foreign investors, including central banks, will pare back some of their exposure to U.S. assets though there are signs that this is not happening nearly as extensively as some had feared last year, when there were signs of a "Sell America" trade."
The U.S. dollar has weakened to its lowest level in four years against a basket of major currencies, falling about 2% this year after a nearly 10% drop last year. President Trump welcomed the decline, linking it to strong business activity. The decline stems partly from investor concerns about unpredictable U.S. economic policies, including tariffs and criticisms of the Federal Reserve, which could reduce foreign demand for U.S. assets. A weaker dollar can make American exports cheaper and aid domestic manufacturers, but it can also make imports more expensive and raise costs for consumers and businesses.
Read at www.npr.org
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