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The possible collapse of the dollar: what could lead to a weakening of the US currency

In April 2025, The Economist published an article examining a scenario of a possible US dollar crisis and its implications for the global economy. Traditionally, the dollar has been considered a safe haven in times of financial instability, but recent events have raised concerns about its resilience.

Reasons for the dollar's weakening


Among the factors contributing to the decline in confidence in the dollar, The Economist highlights:


  • US economic policy: unpredictable trade decisions and rising government debt are undermining investor confidence.

  • Rising interest rates: while this usually strengthens the currency, in this case the rise in rates is accompanied by a decline in interest in US assets.

  • Global changes: countries are looking for alternatives to the dollar in international payments, which may lead to 'de-dollarisation'.


Possible consequences


If the trend of dollar weakening continues, it could lead to:


  • Higher import prices: a weaker dollar makes imported goods more expensive for US consumers.

  • Higher interest rates: higher yields may be needed to attract investors in US government bonds.

  • Reduced US global influence: the dollar as a reserve currency provides the US with an economic advantage; losing this status would weaken its position.


The Economist stresses that while the dollar remains the dominant currency, current trends require careful analysis and possible adjustments to US economic policy to maintain investor confidence.

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