US dollar under pressure: What this means for the global economy!

US dollar under pressure: What this means for the global economy!

The global economy is facing profound change as the US dollar, long recognized as the dominant reserve currency, comes under pressure. According to a recent report by Mercury The dollar has lost almost 10% of its value in the last 12 months and is currently at USD 1.17 for one euro. This development is largely shaped by the economic policy under Donald Trump, which is characterized by tariff chaos and soaring national debt.

US debt now stands at $36.6 trillion and could rise by another $3 trillion by 2034. A weak dollar could boost exports as US products become cheaper abroad, but at the same time it would make imports more expensive and endanger the competitiveness of American companies. ZDF reports that investors are increasingly investing in gold due to the uncertainty, which has already caused prices for the precious metal to rise.

Global impact of the dollar situation

Geopolitical crises and the US government's protectionist economic policies have not only weakened the dollar, but have also threatened the prospects for stabilization. Christine Lagarde has called for a stronger role for the euro in the international monetary system. This could counteract a possible decline in the dollar's influence. The head of the Chinese central bank also advocates a multipolar currency system with the renminbi, which also calls into question the position of the dollar.

The decline in the value of the dollar also has direct consequences for global trade. This makes a vacation in the USA cheaper for European tourists because they get more dollars for their money. At the same time, online shoppers from various countries find US products attractive due to the weak dollar. But the high customs duties and shipping costs also have to be taken into account.

Economic challenges and perspectives

The challenge posed by Trump's trade and customs policy is particularly noticeable for smaller German export companies. Rising import costs caused by a weak dollar could affect the competitiveness of German goods in the US market, while at the same time cheaper US imports could curb inflation in Europe.

US national debt could rise to at least 130% of GDP by 2034. This requires the issue of government bonds with high interest rates in order to finance the new debt. In an environment where competitive conditions are changing rapidly, the dollar's special position as the dominant currency may fade in the near future, allowing alternative currencies to gain influence.

Overall, there are signs of a potential destabilization of the global monetary system, in which the dollar currently still plays the dominant role. The future remains uncertain as global markets respond to the impact of these deep economic upheavals.