What a Weak Dollar Means for You

HEADLINES
What You Need To Know

President Trump revealed plans Monday to impose steep blanket tariffs on imports from 14 countries, effective August 1. The move follows the expiration of a 90-day tariff pause. Tariffs will range from 25% to 40%, hitting major exporters like Japan, South Korea, and Malaysia, as well as smaller trade partners such as Laos and Myanmar. Trump shared form letters to each nation’s leader on Truth Social, stating the tariffs could be adjusted depending on “our relationship.” He later signed an executive order pushing the original deadline back to August 1. Markets dropped following the announcement, with the Dow falling 422 points.

Delta Air Lines raised its 2025 profit forecast and said summer travel is looking stronger than expected. CEO Ed Bastian said bookings have picked up after a soft start to the year, though travelers are waiting longer to book. Delta now expects $5.25 to $6.25 per share in earnings, down from its earlier $7.35 target. Shares jumped 11% on the news. Premium seats and its Amex partnership helped revenue hit $15.5 billion last quarter.

Apple’s newest movie release, F1: The Movie, just became the company’s highest-grossing film ever, racing past $293 million at the global box office. That puts it ahead of Ridley Scott’s Napoleon, which brought in $221 million, and well above Killers of the Flower Moon, Argylle, and Fly Me to the Moon. The movie’s success is also thanks to its strategic partnership with IMAX, which accounted for over $60 million of total ticket sales. Despite a reported production budget of up to $300 million and another $100 million for marketing, Apple seems comfortable playing the long game here. Unlike traditional studios, Apple isn’t betting its future on entertainment, but it’s making a serious push into the industry. With its tech empire backing these projects and a growing roster of cultural hits like Ted Lasso and Coda, Apple’s Hollywood ambitions are clearly picking up speed.

Linda Yaccarino is stepping down as CEO of Elon Musk’s social platform X, wrapping up a two-year run that began shortly after Musk acquired the former Twitter. Her departure follows backlash against the platform’s AI chatbot, Grok, which made headlines this week for generating antisemitic responses and referencing Hitler. Grok is owned by Musk’s xAI, which recently merged with X in a deal valuing the AI firm at $80 billion. In her exit post, Yaccarino said it had been the opportunity of a lifetime and thanked Musk for trusting her with the company’s transformation into the so-called “Everything App.” While she didn’t give a specific reason for stepping down, sources say her exit had been in motion for over a week.

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OPINION
Matt Allen’s Take

When most people hear the dollar is falling, their first reaction is panic.

“Is inflation about to surge?”
“Is the U.S. economy in trouble?”
“Should I be worried?”

But as someone who studies this stuff every day, I think the answer is more nuanced.

Yes, the dollar’s 10.7% drop in the first half of 2025 is its worst stretch since 1973. But believe it or not, that’s not automatically a bad thing. In fact, in the short term, a weaker dollar could actually help America. Over the long term, it poses some risks we’d be smart to keep an eye on.

Let’s break this down in plain English.

There are two big reasons the recent decline could benefit the U.S. economy.

First: It helps American businesses compete.

When the dollar weakens, U.S. products get cheaper overseas. If you’re in Europe or Japan or South Korea, American goods are effectively on sale.

That’s a big deal because over 40% of S&P 500 revenues come from international sales. For companies in manufacturing, agriculture, or tech exports, this is like getting a tailwind. You don’t have to change your product. You’re just more competitive globally because of how the math works.

Take a U.S. manufacturer selling tractors abroad. If the dollar weakens by 10%, foreign buyers can get more bang for their buck. That can mean more orders, more factory jobs, and stronger economic growth at home.

Exports in May were up 5.5% year-over-year. That’s not a coincidence.

And with reshoring efforts in full swing, bringing supply chains back to the U.S., this kind of pricing advantage helps close the gap with countries like China that have had a cost edge for years.

Second: The dollar was overvalued, and it needed to come down.

Before this recent drop, the dollar was trading more than 20% above its long-term average. That isn’t healthy. It makes imports too cheap and exports too expensive. It distorts the economy.

What we’re seeing now is more of a normalization than a crisis. The market is correcting years of imbalance.

Think of it like air slowly coming out of an overinflated balloon. It’s not bursting. It’s just getting back to a sustainable level.

The Federal Reserve Bank of St. Louis has shown a clear pattern here. When the dollar strengthens, the trade balance gets worse. When the dollar weakens, trade tends to improve. That’s exactly what we’re seeing play out in real time.

But the story doesn’t end there.

While the short-term effects might be positive, there’s a deeper risk I’m watching closely.

If this decline continues, and if we keep mismanaging our fiscal house, the U.S. could eventually lose its status as the world’s reserve currency.

That would be a very big deal.

Right now, the U.S. dollar is what central banks around the world rely on. It’s the default for global trade, savings, and financial safety. That gives the U.S. tremendous advantages. We get lower borrowing costs, more flexibility with deficits, and unmatched geopolitical influence.

But cracks are starting to show.

In 2025 alone, central banks bought over 1,000 metric tons of gold. That was the fourth year in a row of massive gold buying. The dollar’s share of global foreign exchange reserves has fallen to 57.4%, its lowest level since 1994.

Why? Because other countries are hedging their bets.

They see rising U.S. debt, massive deficits, and political dysfunction. They worry that American policymakers are no longer serious about fiscal discipline. They also see the dollar being used as a political weapon through sanctions, and that has pushed some countries to look elsewhere.

So they’re diversifying. Into gold. Into the Chinese yuan, the Australian and Canadian dollars, and other reserve assets. And it’s not just happening at the edges anymore. It’s becoming a clear, strategic trend.

If this continues, the dollar’s dominance could slowly erode over the next few decades. That would raise borrowing costs for the U.S., limit our economic leverage, and reduce our ability to respond to future crises.

Personally, I’m not sounding the alarm just yet. The dollar is still the king of currencies, for now.

But I am watching for signs that our fiscal recklessness is getting worse. The projected $2 trillion deficit this year and national debt nearing $40 trillion aren’t just scary numbers. They’re fuel for long-term dollar weakness.

And if we don’t get that under control, the world will find alternatives. Slowly at first, then all at once.

So yes, the dollar’s recent drop has a silver lining. But if we lose the trust of global markets, that silver lining could quickly turn into a storm cloud.

Every Thursday, I send premium members one high-conviction stock idea. I send them two high conviction stocks from myself plus two stocks tracked from billionaire investors and members of Congress—so you know what they’re buying and why they’re betting big.

UPCOMING
What You Need To Watch

On Tuesday, June CPI inflation data is released. Core PCE may be the Fed’s favorite, but CPI still moves markets. Headline CPI came in at 2.4 percent last month, and another upside surprise would challenge the idea of rate cuts this fall. I’m watching shelter and services inflation closely. They’ve been sticky and continue to pressure the Fed’s timeline.

On Wednesday, we get June PPI inflation data. It doesn’t usually lead the headlines, but it matters. Producer prices often show up in CPI with a lag, so if input costs are rising again, it could signal inflation isn’t cooling as fast as the market expects.

On Thursday, June retail sales data drops. This is the cleanest read on how the U.S. consumer is holding up. With job growth slowing and credit card delinquencies rising, a weak number could point to demand fatigue.

On Friday, July’s preliminary Michigan Consumer Sentiment report is released. Sentiment has been rebounding, but if inflation expectations jump or confidence slips, it could signal that consumers are feeling the strain. That would matter for both the soft landing narrative and the Fed’s outlook.

TIP
Why I Watch for Share Dilution Before Buying a Stock

One thing I always check before investing in a company is whether it's diluting its shares. When a company issues more stock, it increases the number of shares outstanding, which can reduce the value of each existing share.

It might not seem like a big deal at first, but over time, dilution can quietly erode your ownership and limit your upside. I look at the share count over the past few years and check if management is using equity to raise cash or fund excessive stock-based compensation. A great business should be growing its value not constantly shrinking your piece of it.

CHART
BITCOIN STOCK

TERM
Deferred Taxes

Deferred tax assets represent taxes a company has overpaid or losses it can use to lower future tax bills. I look at them to understand how much future tax relief a company has built up.

For example, if a company had a significant loss last year, it might not owe taxes for a while once it becomes profitable again. That future benefit shows up on the balance sheet as a deferred tax asset.

These don’t impact cash flow today, but they can improve earnings down the line. I pay attention to them in turnaround stories or companies coming out of unprofitable phases.