The Dollar Is Quietly Declining...
And What You Can Do About It
Arguments For A Declining Dollar
If you’ve been watching the U.S. dollar in the long-term, something very important is unfolding: the dollar has been gradually losing ground, and not just short term. Structurally, the dollar has been in a slow decline compared to key currencies such as the euro. Meanwhile, cash is losing buying power... and the banks aren’t sounding any alarms - none.
Well, let’s take a closer look at what’s happening, AND what it means for your money.
The Long Decline Is Real
The Dollar Index (DXY) peaked in the 1980s, and has since then been on a downward trajectory, posting a series of lower-highs over the years. In the first half of 2025, the DXY saw its worst first-half performance since the Nixon Gold Policy in 1971, and is now falling below the 99 threshold.
Meanwhile, the euro gained over 14% YTD (2025) with EUR/USD climbing above $1.18. Analysts expect further strength - possibly to $1.25+ over the next 12–18 months.
https://www.tradingview.com/chart/?symbol=TVC%3ADXY
Why This Is Happening?
U.S. Fiscal and Policy Instability: Ongoing budget deficits, political uncertainty, and pressure on the Fed are unsettling global investors. The combination of these factors is making the dollar less and less appealing as the reserve currency of the world.
Global Diversification: Central banks and large funds are increasingly diversifying away from the dollar, allocating more capital to other currencies and assets.
Europe’s Relative Improvement: The EUR is showing relative stability, and the rising bond yields in the E.U. are attracting capital back into the eurozone.
The Banks Don’t Care (about your money as much as you do)
While banks still lend and denominate transactions in U.S. dollars, they aren't actively hedging the currency risks that individuals face. So the Banks don’t have an incentive to protect the purchasing power of the dollar for its individual savers. As a result, while the institutions adjust, the individual investor is left exposed.
What Can You Do?
Protect your investments by considering the following strategies:
Diversify into International Currencies and Economies: Reduce your exposure to the U.S. dollar by diversifying into foreign currencies and economies. International investments can help balance the risks associated with a weakening dollar.
Invest in Real Assets: Consider allocating a portion of your portfolio into commodities like Gold, Oil, or Real Estate. These assets tend to retain value during periods of currency depreciation, and provides an hedge of value for your capital in the process.
Consider currency-hedged equity funds: These funds can help protect your investments from the risks of currency fluctuations, especially if you’re heavily invested in U.S.-denominated assets.
Stay Informed: Continuously monitor market dynamics, global economic trends, and emerging risks. Staying ahead of shifts in the global financial landscape can help you make more informed decisions about your investments.
Final Take
The dollar isn't crashing. But it's slipping. Slowly, structurally. And unless you’re prepared, this trend in dollar decline could also erode the purchasing power of your wealth over the long-term.
If you enjoyed this breakdown, hit "reply" with your thoughts or share this with someone who still thinks the dollar is invincible. 💬
- The Market Maverick
Markets move. So should your thinking. Get weekly insights of what’s really happening - along with strategies and tips to protect your wealth.
🔗 Article References:
https://www.ft.com/content/d9ecb4b4-5056-4182-8163-c54b41e35a0b
⚠️ Not Financial Advice, Just Honest Insight
What you’re reading is insight, not instruction. The Market Maverick breaks down market trends to inform and empower, but I’m not giving you personalized advice, so be smart: speak to professional advisors, double-check your sources, and make decisions that align with your financial circumstances.
Really sharp breakdown—and there’s a deeper layer here too.
Most people don’t just lose wealth when currencies devalue. They lose clarity. Because their entire sense of security was external to begin with. When the dollar slips, so does their nervous system. That’s what happens when the terrain of authorship hasn’t been built internally.
So yes—diversify, hedge, stay informed. But also? Build inner stability that isn’t denominated in dollars. That’s the kind of currency that doesn’t collapse when the system does.