U.S. dollar down 10% since 2025

The dollar story sounds abstract until it lands in your cart. A weaker U.S. dollar means each greenback buys less abroad, so imported goods, overseas travel, and anything built from foreign parts gets more expensive in dollar terms. That is the basic mechanism. What changed over the past year is scale: the dollar has fallen about 10% against a broad basket of major currencies since early 2025, enough that the move is starting to show up in official price data and in the invoices importers pay. (fred.stlouisfed.org) ### Why does a weaker dollar raise prices? Because most cross-border trade still gets priced through exchange rates, one way or another. If a U.S. buyer is paying a German supplier in euros or a Japanese supplier in yen, a weaker dollar means the same foreign-currency price converts into more dollars. Even when contracts are dollar-denominated, (fred.stlouisfed.org) own margins. That is why the effect can feel delayed — the currency moves first, the price lists catch up later. (wtop.com) ### What is the actual move here? The broad measure matters more than one flashy euro-dollar chart. The Federal Reserve’s nominal broad dollar index tracks the dollar against currencies of major U.S. trading partners. That index has clearly moved lower from early-2025 highs into spring 2026, matching br(wtop.com)bble. It has been a sustained downshift. (fred.stlouisfed.org) ### Are import prices already moving? Yes. The clearest official read is the import-price data. In March 2026, U.S. import prices rose 0.8% from the prior month, after a 0.9% increase in February. Import prices excluding fuels rose 0.6% in March, and overall import prices were up 2.1% from a year earlier. Consumer goods excluding autos were at (fred.stlouisfed.org)r did it,” but the direction is exactly what you would expect when the currency weakens and import costs firm up. (bls.gov) ### Is the dollar the only reason prices are rising? No — and this is the important complication. Tariffs are also pushing goods prices higher. The Fed published work in April estimating that tariffs implemented through November 2025 raised core goods PCE prices by 3.1% through February 2026 and contributed 0.8% to core PCE overall, with pass-through building gradually over a(bls.gov)ff feels pricier, households may be getting hit by both channels at once — tariffs and a weaker currency. (federalreserve.gov) ### Why did the dollar weaken in the first place? Basically, investors got less comfortable with the U.S. policy mix. Market coverage through 2025 tied the drop to trade-policy volatility, fiscal worries, and expectations that U.S. interest-rate support for(federalreserve.gov)ntiment. You do not need every macro detail to see the result: fewer reasons to hold dollars at the old premium. (money.usnews.com) ### Who feels this first? Travelers notice fast — hotels, meals, and tickets abroad convert into more dollars. Import-heavy retailers and smaller manufacturers feel it next because their landed costs rise. Lab buyers are a good example: equipment, rea(money.usnews.com)replacement inventory costs more. That pressure is often quieter than a big sticker shock, but it is real. (wtop.com) ### Does a weaker dollar help anyone? Yes. U.S. exporters can become more competitive because their goods look cheaper to foreign buyers. Big multinationals also get a translation boost when overseas earnings are converted back into dollars. But for households, the near-term experience is usually simpler: imports cost more, and a lot of daily life depends on imports or imported inputs. (wtop.com) ### So what is the bottom line? The dollar’s 2025-26 slide is not just a market chart. It is a slow price shock. March data already show import costs rising, and Fed work shows other trade costs still passing through with a lag. So even if the dollar stops falling tomorrow, some of the pain can keep arriving months later. (bls.gov)