How weaker dollar is quietly making life more expensive

NEW YORK

Gas prices above $6 per gallon are displayed at Chevron and Shell stations in Monterey Park, California, on April 30, 2026.(AFP)

A hidden force is quietly pushing up costs for everything from your summer vacation to your weekly grocery bills: A weaker U.S. dollar.

The dollar has fallen about 10 percent against other major currencies since President Donald Trump returned to the White House, a pullback potentially playing a role in Americans’ concerns about affordability.

The U.S. Dollar Index, which measures the greenback against other major currencies, logged its steepest six-month droping more than 50 years in the first half of 2025. Though the decline hasn’t deepened, the dollar index is still about 10 percent lower than the start of Trump’s term.

A strong dollar makes imports cheaper and can help keep inflation in check. A weak one can increase prices on foreign goods but boost American exports.

U.S. presidents have long voiced support for a strong dollar even as they pursued policies that, at times, pushed the currency lower. Trump has suggested a strong dollar puts the U.S. at a disadvantage and that a weak dollar helps American industry. And as with most things with Trump, he's been blunter in his messaging.

“You make a hell of a lot more money with a weaker dollar,” he said last year. Trump isn’t alone in seeing benefits of a weaker buck.

In recent months, corporate earnings calls have been peppered with talk of how a weaker dollar has helped companies from Philip Morris to Coca-Cola, with executives pulling out C-suite phrases like “favorable currency impact” to note how the dip brought tailwinds outside the U.S. that added to bottom lines.

For big multinational companies that do business overseas, a weaker dollar can spur sales for products that suddenly become cheaper. But the vast majority of U.S. businesses are not operating beyond the border. For those catering to domestic customers, it's a different story, particularly if they are reliant on importing goods.

Even among companies that do have a presence outside the U.S., the dollar's fall can have an impact. While many big companies hedge currency to try and insulate themselves or push more sales overseas, smaller businesses are often more susceptible to the turbulence.

Cross the border into Mexico, the top foreign destination of Americans, and your dollar is about 16 percent weaker versus the peso compared with early 2025. Declines of about 10 percent to 17 percent have been recorded elsewhere, including against the Swiss franc, South African rand, Danish krone, Swedish krona and the Euro.

Many economists estimate that, in advanced countries like the U.S., only about 5 percent to 10 percent of a currency dip is passed on to consumers.

But they are an added stress when prices are already affected by other factors.

Take coffee, one of the grocery items that has seen the biggest price hike in the past year. Brazil is the biggest source of coffee for the U.S. and the dollar has fallen around 13 percent versus its real. Currency fluctuations can hit harder in developing economies and, while only a fraction of the change may feed into coffee’s ballooning price, every bit can pile up. Coffee prices are up nearly 19 percent in the U.S. in the past year.

Kenneth Rogoff, a Harvard University economist and former chief economist at the International Monetary Fund, says while “a lot of policies that Trump is doing are something of a cancer for the dollar,” he believes that it was destined to fall no matter who was in charge.

“The dollar had been on a 15-year bull run,” he said. “I would argue the dollar is still wildly overvalued, and over the next maybe five or six years, it might fall 15 percent.”

Rogoff says commodity prices are likely to rise, particularly with the impact of the Iran war on fuel prices.

“They’re just going to go up,” he says, “no matter what the dollar’s at.”