U.S. Dollar Falls 9.4% Amid Global Distrust of U.S. Economic Leadership and Tariff Policies

The U.S. dollar is currently in decline amid a growing global "loss of faith in U.S. leadership," according to a recent analysis by Macquarie Group [1]. The firm attributes the weakening of the greenback to a series of high-profile policy moves, including the imposition of steep tariffs on key trading partners such as Brazil, India, and Switzerland. These actions have raised concerns among foreign governments and investors about the U.S.’s commitment to multilateral economic cooperation and its ability to maintain a stable and predictable global financial environment.

Thierry Wizman, Global FX & Rates Strategist at Macquarie, notes that the U.S. dollar has lost 9.4% of its value year-to-date and is unlikely to return to its earlier levels without a fundamental shift in policy direction [1]. The analyst warns that continued aggressive tariff policies could push countries like Brazil and India closer to China and other non-U.S. economic blocs, including the BRICS nations. This, in turn, may accelerate efforts to reduce dependence on the U.S. dollar as a global reserve currency.

The impact of these tariffs is already being felt in global markets. Switzerland, a historically neutral U.S. ally, is facing a 39% tariff on its gold exports, prompting a spike in gold futures to a record high of over $3,500 per troy ounce. The Financial Times reported that the new tariff will also apply to Switzerland’s pharmaceutical, watchmaking, and technology sectors—industries that are critical to its export-driven economy. A Swiss business lobbying group warned that the tariffs could effectively eliminate the Swiss tech industry’s export capabilities to the U.S.

Wizman also points to President Trump’s public support for a weaker dollar, a stance that has been interpreted as a signal by global markets. “Now it doesn’t sound good, but you make a hell of a lot more money with a weaker dollar – not a weak dollar but a weaker dollar – than you do with a strong dollar,” Trump said on July 25 [1]. This admission, combined with the recent tariff announcements, has reinforced a perception among international investors that the U.S. is willing to prioritize short-term political gains over long-term economic stability.

The broader implications of this shift in perception are significant. Macquarie suggests that the dollar’s decline reflects a deeper structural change in how the world views U.S. economic leadership. While the U.S. remains the world’s largest economy, its ability to maintain the dollar’s dominant role is increasingly being questioned. This has prompted central banks and institutional investors to reconsider their reliance on the dollar, with some exploring alternative reserve currencies or regional economic partnerships.

The dollar’s decline is also being reflected in market movements. Although the U.S. dollar index (DXY) saw a marginal rise over the past 24 hours, analysts remain skeptical about its ability to recover. Meanwhile, gold prices have surged, with gold futures hitting record levels in response to the Swiss tariff news. Equities markets in the U.S. and Europe showed mixed performance, with S&P 500 futures rising and European indices showing modest gains [1].

Macquarie’s analysis suggests that the dollar’s decline is not just a result of immediate policy shocks but part of a broader realignment in global economic power. As more countries seek to reduce their exposure to U.S. dominance, the long-term implications for the global financial system could be profound.

Source: [1] title1.............................(https://fortune.com/2025/08/08/us-dollar-decline-global-loss-of-faith-in-us-leadership-macquarie/)