Charles Esther
The US dollar is showing significant signs of weakness in 2025. Since the start of the year, the US Dollar Index has fallen more than 8%, marking its lowest level in about three years. Growing concerns around President Donald Trump’s trade policies and the threat of a potential recession are major factors weighing down the greenback.
Here’s a closer look at what top economists and financial institutions are saying about the dollar’s recent slide — and what it could mean for the future.
A Perfect Storm: Trade Wars, Inflation, and Global Shifts
Experts point to multiple factors contributing to the dollar’s decline, including uncertainty surrounding Trump’s tariffs, rising fears of recession, and broader global shifts in currency dependence. As these forces combine, investors and policymakers alike are bracing for continued volatility.
What Leading Institutions and Experts Are Saying
Deutsche Bank: A Major Dollar Downtrend is Here
Analysts at Deutsche Bank officially declared the start of a “major dollar downtrend” in a note released Thursday.
They highlighted three main drivers:
- A reduced global appetite for funding the growing US deficits.
- A gradual unwinding of elevated US asset holdings.
- More domestic fiscal spending aimed at boosting growth outside the US.
According to Deutsche Bank, these shifts could sustain a prolonged bear market for the dollar.
Goldman Sachs’ Jan Hatzius: Inflation Risks Are Rising
Jan Hatzius, Chief Economist at Goldman Sachs, believes the dollar has much further to fall.
In an op-ed, Hatzius warned that the depreciation is likely to add more pressure on consumer prices, already strained by tariffs.
“Recent dollar depreciation supports our view that higher US tariffs will fall predominantly on American consumers rather than foreign producers,” he wrote.
Ken Griffin, Citadel: America’s Brand at Risk
Speaking at Semafor’s World Economy Summit, Citadel founder Ken Griffin painted a bleak picture.
He noted that America’s economic standing has deteriorated quickly, stating, “We have become 20% poorer in four weeks” compared to the euro.
Griffin emphasized the psychological and real impact on investors who are “just trying to tread water and not drown.”
Apollo’s Torsten Slok: Service Sector Vulnerabilities
Torsten Slok, Chief Economist at Apollo Global Management, raised concerns about broader economic risks.
Slok warned that a weakening dollar could harm America’s crucial service sector exports — representing about 80% of US GDP.
He added that the depreciating dollar also puts upward pressure on inflation and creates new macroeconomic challenges.
PIMCO: The End of Dollar Dominance?
Analysts at PIMCO stressed that the US’s long-held privilege of having the dollar as the global reserve currency is not guaranteed.
They warned that if global capital flows into US assets slow, it could signal a move toward a “more multipolar world,” diminishing the dollar’s role on the world stage.
UBS: A Significant Weakening
Strategists at UBS highlighted that the dollar has “weakened significantly” and noted increased volatility in foreign exchange markets, reaching levels not seen since 2022.
Following the dollar’s recent sell-off, UBS is steering clear of dollar-based trades for now.
Adam Turnquist, LPL Financial: Technical Breakdown Looms
Adam Turnquist, Chief Technical Strategist at LPL Financial, said that escalating trade tensions with China have intensified concerns about US growth.
He noted that hedging costs against a weaker dollar have surged to multi-year highs.
“A breakdown from the dollar’s consolidation range would not only be technically significant but could also stoke broader fears about the health of the US economy,” Turnquist warned.
Bank of America: A Secular Decline
Bank of America analysts, led by Michael Hartnett, declared that the dollar has entered a secular, long-term decline.
They pointed to the fact that the currency is trading 4.6% below its 200-day moving average and emphasized that soaring gold prices are a brutal indicator of the weakening dollar.
Neuberger Berman’s Shannon Saccocia: Structural Damage Ahead?
Shannon Saccocia, Managing Director at Neuberger Berman, observed that the dollar’s continued fall — even amid stable equity and bond markets — is deeply concerning.
She warned that this simultaneous sell-off points to “structural damage” in global demand for US assets.
If trends continue, foreign investors may start pulling back, finding that currency losses outweigh yield gains.
Final Thoughts: What’s Next for the Dollar?
The weakening of the dollar signals more than just currency volatility — it raises deeper concerns about inflation, trade relations, and America’s standing in the global economy.
As trade wars escalate and recession risks grow, experts agree: the dollar may face more headwinds ahead.
Investors, policymakers, and businesses alike will need to prepare for a future where the dollar is no longer the unstoppable force it once was.
