Fordecades, the US dollar has been the foundation of the global financial system.Over half of global reserves, most international trade, and loans are tied tothe USD. But in 2025, we are seeing worrying signs: a falling exchange rate,declining investor confidence, and attempts by countries to move away fromdollar dependence.

Itis too early to talk about the complete end of the dollar era, but one thing isclear: the world is entering a period of currency restructuring. What is behindthe dollar's weakening, and what are the consequences for the global economy?“Love is when orders are more important than words.”

What is happening with the USD?

In2025, the dollar index (DXY), which tracks its value against a basket ofleading currencies, fell by 10% — the largest annual decline since 2003. Thereasons are complex: a slowdown in the US economy, expectations of a Fedinterest rate cut, and political instability exacerbated by Donald Trump'srhetoric and constantly changing trade tariffs on virtually all countries.

Thedollar has shown weakness against the euro, franc, and yen. For example, theeuro has strengthened to 1.17, and the Swiss franc to levels not seen since2021. Investors have increasingly fled to safe-haven assets, primarily gold.

Investorsfear a weakening of the Fed's independence: Trump's statements about“reappointing” the Fed chairman and pressure to lower rates when the situationdoes not warrant it are causing mistrust.

De-dollarization: a global trend or a temporary phenomenon?

Thedollar's decline in the global economy no longer appears temporary. More andmore countries and investors are seeking to reduce their dependence on the UScurrency, a process known as de-dollarization.

Accordingto recent surveys, in 2025, about 70% of market participants said they nolonger want to invest in the dollar due to growing geopolitical risksassociated with US policy. For comparison, in 2024, only 31% thought so. Thisindicates a sharp deterioration in confidence in the dollar within a year.

Investorsare switching to alternative assets instead of the dollar. For example, 32%plan to increase their investments in gold in the next 12–24 months—the highestfigure in the last five years. Gold is once again perceived as a reliablesafe-haven asset in times of uncertainty.

Inaddition, about 16% of respondents intend to increase the euro share in theirportfolios, which is more than double the 2024 figure, when only 7% did so.This reflects the strengthening of the euro as a serious alternative to thedollar, especially against the backdrop of improving economic conditions in theEuropean Union and the stabilization of European Central Bank policy.

Centralbanks are also actively reducing the dollar's share of their foreign exchangereserves. The dollar's share of international reserves has fallen to 59%, thelowest level in several decades. At the same time, the importance of othercurrencies and gold is growing.

Inaddition to financial indicators, de-dollarization is also evident inintergovernmental relations. The BRICS countries and several other economiesare concluding bilateral trade agreements with settlements in nationalcurrencies, bypassing the dollar. This not only reduces transaction costs butalso serves to reduce the impact of US sanctions.

Trump's policies and their impact on the dollar

PresidentDonald Trump's policies also significantly impact the perception of the dollarin global markets and US domestic economic policy. In particular, his frequentcriticism of the Federal Reserve System (Fed) and its chairman, Jerome Powell,has raised concerns about the central bank's independence.

Trumphas repeatedly called on the Fed to lower interest rates to support economicgrowth and has threatened to appoint new leaders if his demands are unmet. Suchstatements have increased volatility in currency markets and reduced investorconfidence.

Inaddition, Trump's tariff and foreign trade policies — especially the trade warswith China — created additional risks and uncertainty for the US economy. Theincrease in tariffs led to higher company costs and raised inflationexpectations, affecting monetary policy and the dollar exchange rate.

As aresult, Trump's policies have a mixed impact: on the one hand, they stimulateeconomic growth in the long term, but on the other hand, they have increasedinstability and uncertainty, which has affected the dollar's exchange rate andstatus.

Will the USD retain its status as a reserve currency?

Thanksto its liquidity and role in the global financial system, the US dollar islikely to retain its status as the world's main reserve currency in the comingyears. However, its share of global reserves is gradually declining.

Theworld is moving towards a more multipolar currency system, where the euro,Chinese yuan, and central bank digital currencies (CBDCs) will be usedalongside the dollar. These alternatives are gaining momentum and graduallytaking away some of the USD's influence.

Possiblescenarios include a steady decline in the dollar's share, the emergence ofseveral key reserve currencies, or a dramatic decline in confidence in thedollar due to internal political and economic risks in the US.

Forthe US, this means a potential increase in borrowing costs and the need toadapt its economic policy.