Several interrelated factors are dragging the dollar down. A major one is a chaotic trade and tariff policy that is still a work in progress. At the same time, there are growing concerns about the country’s public debt—concerns that will only get stronger if Congress passes the Trump administration’s “big, beautiful bill,” which will, at least on paper, increase the national debt by trillions of dollars over the next decade.
Commodity prices are also on the rise, and rising commodity prices tend to strengthen the currencies of major exporters like Canada and Australia. This in turn puts additional pressure on the U.S. dollar. Plus, Europe and Asia are rebounding quickly from last year's slowdown, causing a flight to safety to flow to foreign equities and bonds.
