Why the Dollar’s Struggles May Be Just Beginning

​The U.S. dollar has been sliding since Trump’s early April “liberation day” tariff blitz—and analysts say the pain may not be over.

According to strategists at BofA Global Research, a mix of tariff fears, recession risks, and ballooning fiscal deficits are weighing on sentiment. The ICE U.S. Dollar Index, which tracks the greenback against six major currencies, has dropped nearly 4% since the tariffs were announced. And while a recent 90-day truce between the U.S. and China offered a brief reprieve, experts still expect more weakness ahead.

Economist Dario Perkins of TS Lombard warns that U.S. policy could ultimately engineer its own dollar decline. He argues that while the dollar’s reserve status is likely safe for now, the Trump administration’s push for a weaker currency—via protectionism and higher spending—might work simply because it hurts the U.S. economy while forcing rivals to step up.

Perkins also notes that investor demand for “safe” dollar assets won’t vanish overnight, but America’s era of exceptionalism may be ending. If the U.S. keeps running deficits and pushing for deglobalization, the dollar could continue to slide—even if its reserve role remains intact.

​Bottom line: The dollar’s decline isn’t just about trade headlines. It’s being driven by a deeper shift in global economics—and by U.S. policies that, intentionally or not, are undermining its strength. For now, the trend is clear: the dollar is heading lower.