The U.S. Dollar’s Collapse Since Trump’s 2025 Inauguration
Since President Trump’s triumphant return to the White House in January 2025, the U.S. dollar has taken a beating in the Forex markets. While the mainstream media is too busy spinning narratives, traders and investors are watching in real-time as the dollar loses ground to the British Pound (GBP), the Euro (EUR), and the Japanese Yen (JPY) at an alarming rate.
The Dollar’s Bloodbath Since January 2025
On January 20, 2025, the day of Trump’s second inauguration:
GBP/USD was 1.23
EUR/USD stood at 1.07
USD/JPY was 148
Since then, the greenback has fallen hard:
The GBP has surged past 1.30, marking a nearly 6% increase in just over a month.
The Euro has climbed above 1.12, pushing multi-month highs.
The Yen has strengthened dramatically, sending USD/JPY below 140 after intervention warnings from the Bank of Japan.
What’s Driving the Dollar’s Collapse?
It’s not Trump’s policies that are dragging the dollar down—it’s the mess he inherited. The U.S. Federal Reserve is now caught between a rock and a hard place, with inflation lingering from the previous administration’s reckless spending, and markets anticipating a shift in monetary policy. Despite Trump's push for a strong dollar, the Fed’s hesitance to act decisively has sent traders into a frenzy.
Several key factors are driving the dollar’s decline:
Market Rebalancing After Biden’s Dollar Bloat
Under Biden, the dollar artificially strengthened in late 2023 and 2024, as the Fed kept rates higher for longer. But once the reality of economic deterioration set in, markets began pricing in a weakening trend for 2025.
The Fed’s Uncertain Rate Path
The Federal Reserve remains undecided on rate cuts, with markets expecting a pivot by mid-2025. Traders are now front-running the Fed, dumping dollars in anticipation of easier monetary policy.
Geopolitical Shifts and Foreign Diversification
With BRICS+ nations accelerating their de-dollarization plans, the greenback is losing dominance in international trade. China and Russia, in particular, have increased trade settlements in non-dollar currencies, reducing global demand for USD.
Forex Speculation and Risk Appetite
Global investors are seeking riskier, higher-yielding assets, pushing capital into European and Asian markets. The risk-on sentiment has fueled further dollar sell-offs, reinforcing the downtrend.
Final Thought
The U.S. dollar is in free fall, and unless the Federal Reserve gets aggressive with its policy response, this trend will only worsen. Trump may be back in office, but the damage done from the last four years won’t be undone overnight. The question isn’t if the dollar will rebound, but how long the beating will last before a serious intervention.
Bill White Says...
"Since Trump took office (again), the dollar has been dropping faster than a politician's campaign promises. Good for exports, bad for your grocery bill—unless you’re paying in British Pounds!"