US dollar just had its roughest year since 2017, dropping 9.4%
The US dollar slid about 8% to 10% in 2025—its biggest yearly drop in almost a decade—after President Trump's April tariffs and ongoing economic uncertainty shook things up.
This ended a long run where the dollar had climbed nearly 40% since 2010.
Why does this matter?
A weaker dollar makes imported goods and overseas trips pricier for Americans, but it gives a boost to US exporters.
Foreign investors are now less keen on holding dollars, and experts like Morgan Stanley think the slide could continue through this year as US rates and growth cool off.
What's behind the slump?
It's a mix of things: shaky job numbers, confusion over tariff policies, debates about the Fed's independence, rising government deficits, and slower growth.
All this led economists to cut their growth outlook from 2.3% to just 1.4% this spring—contributing to reduced foreign investment flows into the US.