A Weaker U.S. Dollar and Its Impact on Your Weekly Expenses
A subtle force is steadily driving up the costs for everything, from your summer trips to your weekly grocery bills: a weaker U.S. dollar. Over the past months, the dollar has dropped by approximately 10% against other prominent currencies since President Donald Trump’s return to the White House. This decrease is likely a contributing factor to American’s concerns about affordability.
Economist’s View on the Weaker Dollar
According to economist Thomas Savidge of the conservative-leaning American Institute for Economic Research, this drop in the dollar’s strength is “a hidden tax”. He suggests that “what your dollar is going to be able to buy is going to shrink.”
The Current Position of the Dollar and Its Impact
Understanding where the dollar stands and the potential impacts for the average American is crucial. The U.S. Dollar Index, which measures the greenback against other significant currencies, recorded its most substantial six-month drop in over 50 years in the first half of 2025. Although the drop hasn’t deepened, the dollar index is still approximately 10% lower than at the start of Trump’s term.
The Benefits of a Weaker Dollar for Big Multinationals
Interestingly, Trump isn’t the only one who sees the benefits of a weaker dollar. Over recent months, corporate earnings calls have been filled with talk about how a weaker dollar has positively impacted companies from Philip Morris to Coca-Cola.
The Downsides for Smaller Companies
While many big companies hedge currency to guard themselves, smaller businesses are often more exposed to the turbulence. For example, David Navazio, CEO of Pennsylvania-based Gentell, has had to raise some prices to reflect the currency fluctuation.
The Rise of Other Currencies
For the American consumer, the reality of a declining dollar is most noticeable during foreign travel or when making a purchase directly from an international seller. For example, cross over into Mexico, and your dollar is about 16% weaker versus the peso compared to early 2025.
The Future of Dollar Movement
While the dollar’s recent drop is remarkable, it has reached lower levels at points in the presidencies of each of Trump’s predecessors. Looking ahead, economist Kenneth Rogoff believes that it was destined to fall no matter who was in charge.
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