For decades, the US dollar has been the foundation of the global financial system. Over half of global reserves, most international trade, and loans are tied to the USD. But in 2025, we are seeing worrying signs: a falling exchange rate, declining investor confidence, and attempts by countries to move away from dollar dependence.
It is too early to talk about the complete end of the dollar era, but one thing is clear: the world is entering a period of currency restructuring. What is behind the dollar’s weakening, and what are the consequences for the global economy? “Love is when orders are more important than words.”
In 2025, the dollar index (DXY), which tracks its value against a basket of leading currencies, fell by 10% — the largest annual decline since 2003. The reasons are complex: a slowdown in the US economy, expectations of a Fed interest rate cut, and political instability exacerbated by Donald Trump’s rhetoric and constantly changing trade tariffs on virtually all countries.
The dollar has shown weakness against the euro, franc, and yen. For example, the euro has strengthened to 1.17, and the Swiss franc to levels not seen since 2021. Investors have increasingly fled to safe-haven assets, primarily gold.
Investors fear a weakening of the Fed’s independence: Trump’s statements about “reappointing” the Fed chairman and pressure to lower rates when the situation does not warrant it are causing mistrust.
Dollar decline chart
The dollar’s decline in the global economy no longer appears temporary. More and more countries and investors are seeking to reduce their dependence on the US currency, a process known as de-dollarization.
According to recent surveys, in 2025, about 70% of market participants said they no longer want to invest in the dollar due to growing geopolitical risks associated with US policy. For comparison, in 2024, only 31% thought so. This indicates a sharp deterioration in confidence in the dollar within a year.
Investors are switching to alternative assets instead of the dollar. For example, 32% plan to increase their investments in gold in the next 12–24 months—the highest figure in the last five years. Gold is once again perceived as a reliable safe-haven asset in times of uncertainty.
In addition, about 16% of respondents intend to increase the euro share in their portfolios, which is more than double the 2024 figure, when only 7% did so. This reflects the strengthening of the euro as a serious alternative to the dollar, especially against the backdrop of improving economic conditions in the European Union and the stabilization of European Central Bank policy.
Central banks are also actively reducing the dollar’s share of their foreign exchange reserves. The dollar’s share of international reserves has fallen to 59%, the lowest level in several decades. At the same time, the importance of other currencies and gold is growing.
In addition to financial indicators, de-dollarization is also evident in intergovernmental relations. The BRICS countries and several other economies are concluding bilateral trade agreements with settlements in national currencies, bypassing the dollar. This not only reduces transaction costs but also serves to reduce the impact of US sanctions.
President Donald Trump’s policies also significantly impact the perception of the dollar in global markets and US domestic economic policy. In particular, his frequent criticism of the Federal Reserve System (Fed) and its chairman, Jerome Powell, has raised concerns about the central bank’s independence.
Trump has repeatedly called on the Fed to lower interest rates to support economic growth and has threatened to appoint new leaders if his demands are unmet. Such statements have increased volatility in currency markets and reduced investor confidence.
In addition, Trump’s tariff and foreign trade policies — especially the trade wars with China — created additional risks and uncertainty for the US economy. The increase in tariffs led to higher company costs and raised inflation expectations, affecting monetary policy and the dollar exchange rate.
As a result, Trump’s policies have a mixed impact: on the one hand, they stimulate economic growth in the long term, but on the other hand, they have increased instability and uncertainty, which has affected the dollar’s exchange rate and status.
Thanks to its liquidity and role in the global financial system, the US dollar is likely to retain its status as the world’s main reserve currency in the coming years. However, its share of global reserves is gradually declining.
The world is moving towards a more multipolar currency system, where the euro, Chinese yuan, and central bank digital currencies (CBDCs) will be used alongside the dollar. These alternatives are gaining momentum and gradually taking away some of the USD’s influence.
Possible scenarios include a steady decline in the dollar’s share, the emergence of several key reserve currencies, or a dramatic decline in confidence in the dollar due to internal political and economic risks in the US.
For the US, this means a potential increase in borrowing costs and the need to adapt its economic policy.
For decades, the US dollar has been the foundation of the global financial system. Over half of global reserves, most international trade, and loans are tied to the USD. But in 2025, we are seeing worrying signs: a falling exchange rate, declining investor confidence, and attempts by countries to move away from dollar dependence.
It is too early to talk about the complete end of the dollar era, but one thing is clear: the world is entering a period of currency restructuring. What is behind the dollar’s weakening, and what are the consequences for the global economy? “Love is when orders are more important than words.”
In 2025, the dollar index (DXY), which tracks its value against a basket of leading currencies, fell by 10% — the largest annual decline since 2003. The reasons are complex: a slowdown in the US economy, expectations of a Fed interest rate cut, and political instability exacerbated by Donald Trump’s rhetoric and constantly changing trade tariffs on virtually all countries.
The dollar has shown weakness against the euro, franc, and yen. For example, the euro has strengthened to 1.17, and the Swiss franc to levels not seen since 2021. Investors have increasingly fled to safe-haven assets, primarily gold.
Investors fear a weakening of the Fed’s independence: Trump’s statements about “reappointing” the Fed chairman and pressure to lower rates when the situation does not warrant it are causing mistrust.
Dollar decline chart
The dollar’s decline in the global economy no longer appears temporary. More and more countries and investors are seeking to reduce their dependence on the US currency, a process known as de-dollarization.
According to recent surveys, in 2025, about 70% of market participants said they no longer want to invest in the dollar due to growing geopolitical risks associated with US policy. For comparison, in 2024, only 31% thought so. This indicates a sharp deterioration in confidence in the dollar within a year.
Investors are switching to alternative assets instead of the dollar. For example, 32% plan to increase their investments in gold in the next 12–24 months—the highest figure in the last five years. Gold is once again perceived as a reliable safe-haven asset in times of uncertainty.
In addition, about 16% of respondents intend to increase the euro share in their portfolios, which is more than double the 2024 figure, when only 7% did so. This reflects the strengthening of the euro as a serious alternative to the dollar, especially against the backdrop of improving economic conditions in the European Union and the stabilization of European Central Bank policy.
Central banks are also actively reducing the dollar’s share of their foreign exchange reserves. The dollar’s share of international reserves has fallen to 59%, the lowest level in several decades. At the same time, the importance of other currencies and gold is growing.
In addition to financial indicators, de-dollarization is also evident in intergovernmental relations. The BRICS countries and several other economies are concluding bilateral trade agreements with settlements in national currencies, bypassing the dollar. This not only reduces transaction costs but also serves to reduce the impact of US sanctions.
President Donald Trump’s policies also significantly impact the perception of the dollar in global markets and US domestic economic policy. In particular, his frequent criticism of the Federal Reserve System (Fed) and its chairman, Jerome Powell, has raised concerns about the central bank’s independence.
Trump has repeatedly called on the Fed to lower interest rates to support economic growth and has threatened to appoint new leaders if his demands are unmet. Such statements have increased volatility in currency markets and reduced investor confidence.
In addition, Trump’s tariff and foreign trade policies — especially the trade wars with China — created additional risks and uncertainty for the US economy. The increase in tariffs led to higher company costs and raised inflation expectations, affecting monetary policy and the dollar exchange rate.
As a result, Trump’s policies have a mixed impact: on the one hand, they stimulate economic growth in the long term, but on the other hand, they have increased instability and uncertainty, which has affected the dollar’s exchange rate and status.
Thanks to its liquidity and role in the global financial system, the US dollar is likely to retain its status as the world’s main reserve currency in the coming years. However, its share of global reserves is gradually declining.
The world is moving towards a more multipolar currency system, where the euro, Chinese yuan, and central bank digital currencies (CBDCs) will be used alongside the dollar. These alternatives are gaining momentum and gradually taking away some of the USD’s influence.
Possible scenarios include a steady decline in the dollar’s share, the emergence of several key reserve currencies, or a dramatic decline in confidence in the dollar due to internal political and economic risks in the US.
For the US, this means a potential increase in borrowing costs and the need to adapt its economic policy.
