Should Europe worry about euro strength and dollar weakness?
Briefly

Should Europe worry about euro strength and dollar weakness?
"The US dollar continues to fall sharply in value against other major currencies, continuing the trend that saw it have its steepest annual drop in almost a decade in 2025. The dollar fell by 1.3% against a basket of currencies on Tuesday (January 27), meaning it has already fallen by 2.6% since the start of 2026. It slumped by 9.5% in 2025."
"Several economists and analysts have attributed the dollar's continuing decline to a lack of investor faith in the US currency, amid continuing concern over unpredictable policymaking from US President Donald Trump. There is also the view that Trump and many in his economic team want the dollar to lose value in the hope that it will boost US exports and manufacturing as part of a long-held strategy. Trump has done little to dispel this."
The US dollar has fallen sharply against major currencies, with a 9.5% slump in 2025 and a further 2.6% decline so far in 2026 after a 1.3% drop on January 27. The euro has reached $1.20 for the first time since 2021, while the pound and yen have hit recent highs. Economists point to diminished investor faith and concern over unpredictable policymaking from President Donald Trump. Some in the administration reportedly favor a weaker dollar to boost exports and manufacturing; Trump publicly welcomed the decline. Stephen Miran proposed tariffs and devaluation as tools to address the trade deficit. The euro surged 13% in 2025, with implications for eurozone economic performance and the health of the labor market.
Read at www.dw.com
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