Desk Report,
Dollar faces biggest fall since 1973
The dollar’s fall in the global market in the first six months of this year is the biggest since 1973. The dollar’s value has fallen by more than 10 percent against the currencies of the United States’ major trading partners.
Dollar faces biggest fall since 1973
The dollar’s significant decline occurred in 1973 after the United States left the gold standard for printing currency. It should be remembered that that decision was a landmark event. After that, the use and value of the dollar in the global financial system increased.
The background is different this time. Now behind the dollar’s decline is President Donald Trump’s efforts to restructure the world order, especially aggressive tariff policies and self-centered foreign policy. Trump’s tariff policies, inflationary fears, and rising government debt – all of which are putting pressure on the dollar. Added to this is the gradual decline in investor confidence in the United States’ leading role in the international financial system.
The decline in the dollar’s value has increased the cost of traveling abroad for American citizens. At the same time, foreign investment in the United States is declining. This is happening at a time when the country is trying to borrow more.
On the other hand, the weakening of the dollar has benefited US exporters, although the cost of imports is increasing. The point is, this is normal when the currency is weak. But President Trump’s threat to impose tariffs has also made these ‘normal’ trade issues uncertain.
However, as time goes by, Trump’s threat to impose tariffs is weakening. That is, in principle, Trump has moved away from that position a little. In this situation, the US stock market is strong, the bond market has also turned around, but the value of the dollar is still falling.
In this situation, Steve Englander, of Standard Chartered’s foreign exchange research department, said, “The dollar is weak or strong, that is not the main question. The main question is, how does the world view your position?”
