Is the US dollar losing its position as the world’s reserve currency?
Recent Decline of the U.S. Dollar
Since the beginning of President Trump’s second term, the value of the U.S. dollar has dropped by approximately 10% against a broad basket of trade partners. These declines have occurred in rapid, dramatic episodes that have unsettled markets. The first significant drop happened in April 2025 following the turbulent introduction of reciprocal tariffs. Another sharp decrease took place in January 2026 during the World Economic Forum in Davos, triggered by heightened U.S. rhetoric concerning Greenland. Such abrupt movements are uncommon for the dollar, given its widespread use and high trading volume. The currency typically experiences steady, substantial daily transaction flows, making these sudden shifts particularly noteworthy.
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