The U.S. Dollar in 2025: Weakened, Yet Still Standing

U.S. Dollar Sees Notable Decline in 2025

In 2025, the U.S. dollar experienced a significant decrease, dropping about 8% on a broad trade-weighted basis. The decline was even more pronounced—around 10%—when measured against major world currencies, as illustrated in Chart 1. This downturn brought an end to the dollar’s steady climb that had persisted since late 2023.

Despite recent discussions about the dollar’s challenges, the currency remains relatively strong. The recent slide merely returned the dollar to its 2024 value, which is also close to its average over the last ten years. Looking further back, the trade-weighted dollar is still hovering near its highest point in the past thirty years, as shown in Charts 2 and 3. Much of the current sentiment is shaped by the difference in recent performance.