What the Slide in the Dollar Means for Trade, Travel and Investment
Currency’s drop renews fears that U.S. position in markets is waning
By David Uberti and Chelsey Dulaney, The Wall Street Journal, Jan. 28, 2026
-
The dollar’s value has fallen to its lowest level in years, affecting international travel, U.S. corporate profits and European exports.
-
Wall Street anticipates further dollar weakness, potentially ending a decadelong period of U.S. economic outperformance and investor appeal.
-
The dollar’s decline is causing issues for other economies, with European central bankers monitoring the euro’s strength and its effect on inflation.
The dollar’s strength over the past decade pushed the stock market higher and helped Americans access cheaper loans to invest in homes or businesses. At the same time, a stronger dollar afforded consumers more purchasing power to buy goods and services from abroad [which reduced inflation]…
The currency last year posted its worst annual performance since 2017. Trade shocks and signs of a slowing economy sparked a “Sell America” trade that dinged U.S. assets. While stocks and bonds recovered, the dollar remained lower, weighed down by fears that a debt-burdened U.S. is scrambling the global order underpinning its own growth…
Some investors warn the dollar’s shift lower could also hit the bottom lines of U.S. companies that import parts and materials and potentially buoy U.S. inflation. Fed Chair Jerome Powell on Wednesday declined to comment on the dollar’s value.
The flip side is that big tech companies, oil exporters and other businesses with overseas customers could see a boost, potentially negating some of the negative effects of a weaker dollar… [end quote]
The overall trend in the Nominal Broad U.S. Dollar Index since 2012 has been toward a stronger USD.
However, the USD has plunged since January 2025 especially during March and April 2025 when President Trump imposed high tariffs and there was a lot of uncertainty. The stock market recovered but the USD did not. Recently, USD made a sharp drop in January 2026 at the same time that gold and silver skyrocketed.
If this is speculation and short term it’s not a cause for concern. But if real money – actual USDs, gold and silver as opposed to asset prices that are buoyed by a flood of debt – continue to signal a breakdown of confidence in the USD there could be a Macroeconomic trend shift all over the world.
Wendy