Worst Annual Start in 50 Years: How Will the Dollar's Sharp Decline Affect Prices?
July 7, 2025 at 15:45
The dollar is experiencing its worst annual start in 50 years. In the first six months of 2025, the dollar fell by more than 10% against the currencies of the United States' major trading partners. "Pravda" points out that this will affect the prices of everyday goods, online shopping from abroad, and even the cost of overseas vacations.
The sharp decline in the dollar comes from multiple factors. Experts say that investors are increasingly worried about inflation, the ever-expanding national debt, and the unstable policies in Washington. A new large-scale budget spending bill has further increased concerns that the dollar will continue to depreciate. Donald Trump's statements have also played a role — he has strongly criticized the Federal Reserve, and his unpredictable tariff policies have added to the uncertainty.
Paul Pasquale, a professor of finance at the University of Michigan, explained that investors no longer view U.S. Treasury bonds as a reliable safe haven — a signal that has never been seen before. What does this mean for ordinary people?
Imported goods prices will rise. Foreign producers are unwilling to lose income: if their income calculated in their own currency decreases, they will raise prices for American customers. Online shopping from abroad, electronics, furniture, and even repair parts — all of these may become more expensive.
Travelers will feel particularly uncomfortable: the current exchange rate is not in their favor. If you go to Europe, every cup of coffee, every train ticket, and every hotel room will be more expensive — simply because it takes more dollars to exchange for euros.
Is there good news? For exporters, yes. U.S. goods will be cheaper for foreign buyers, which may boost industries such as automotive manufacturing and technology. Additionally, the U.S. may see a tourism boom: when the dollar weakens, Europeans and Asians may find traveling to the U.S. more attractive. However, domestically, the impact is currently mainly negative — and is affecting an increasing number of consumers.
Original article: https://www.toutiao.com/article/7524609430344712758/
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