Nicole Lappin

This drop is showing up in the dollar index, which is a metric that tracks the dollar against a basket of other major foreign currencies like the euro, the yen and the British pound. That's a big move in just a short period of time. So what changed? Well, a lot of recent movement traces back to tariffs.

As we know, President Trump announced sweeping tariffs on imports from nearly every single major trading partner, and that has spooked investors in a big way. But the tariffs were actually supposed to help the U.S. economy. The thinking was these tariffs would make foreign goods more expensive, which might slow demand for those imports.

As we know, President Trump announced sweeping tariffs on imports from nearly every single major trading partner, and that has spooked investors in a big way. But the tariffs were actually supposed to help the U.S. economy. The thinking was these tariffs would make foreign goods more expensive, which might slow demand for those imports.

As we know, President Trump announced sweeping tariffs on imports from nearly every single major trading partner, and that has spooked investors in a big way. But the tariffs were actually supposed to help the U.S. economy. The thinking was these tariffs would make foreign goods more expensive, which might slow demand for those imports.

While the stock market wasn't into tariffs, slowing demand for those imports could could, in theory, strengthen the dollar. But instead, the opposite happened. The scale of the tariffs and the uncertainty about who would be hit and how hard just created turbulence. Investors started selling off US assets and then pulling money out of the country, which weakened the demand for the dollar.

While the stock market wasn't into tariffs, slowing demand for those imports could could, in theory, strengthen the dollar. But instead, the opposite happened. The scale of the tariffs and the uncertainty about who would be hit and how hard just created turbulence. Investors started selling off US assets and then pulling money out of the country, which weakened the demand for the dollar.

While the stock market wasn't into tariffs, slowing demand for those imports could could, in theory, strengthen the dollar. But instead, the opposite happened. The scale of the tariffs and the uncertainty about who would be hit and how hard just created turbulence. Investors started selling off US assets and then pulling money out of the country, which weakened the demand for the dollar.

So how does a weaker dollar affect us? Well, the side effect that normally gets brought up first is more expensive international vacation. So if you're planning a honeymoon in Italy, If so, I am jealous, even though you will have to pay more for that Aperol Spritz. If you're traveling abroad, the dollar simply won't go as far. But there are other side effects, too.

So how does a weaker dollar affect us? Well, the side effect that normally gets brought up first is more expensive international vacation. So if you're planning a honeymoon in Italy, If so, I am jealous, even though you will have to pay more for that Aperol Spritz. If you're traveling abroad, the dollar simply won't go as far. But there are other side effects, too.

So how does a weaker dollar affect us? Well, the side effect that normally gets brought up first is more expensive international vacation. So if you're planning a honeymoon in Italy, If so, I am jealous, even though you will have to pay more for that Aperol Spritz. If you're traveling abroad, the dollar simply won't go as far. But there are other side effects, too.

Imported goods get more expensive, whether it's French wine or Chinese electronics. Prices on foreign goods rise as the dollar loses strength. Even before tariffs kick in, we're already seeing this at checkout. And then as the dollar weakens, foreign investors might pull their money out of the U.S. market, which could lead to less demand for stocks and bonds and then more volatility. So fun.

Imported goods get more expensive, whether it's French wine or Chinese electronics. Prices on foreign goods rise as the dollar loses strength. Even before tariffs kick in, we're already seeing this at checkout. And then as the dollar weakens, foreign investors might pull their money out of the U.S. market, which could lead to less demand for stocks and bonds and then more volatility. So fun.

Imported goods get more expensive, whether it's French wine or Chinese electronics. Prices on foreign goods rise as the dollar loses strength. Even before tariffs kick in, we're already seeing this at checkout. And then as the dollar weakens, foreign investors might pull their money out of the U.S. market, which could lead to less demand for stocks and bonds and then more volatility. So fun.

The happy story, though, is that U.S. exports become cheaper abroad. So if you're a business owner that sells overseas, that could be good. Foreign buyers get more bang for their buck, which could boost your sales. But for those of us back home, a weaker dollar also means mounting inflation pressure. If the dollar keeps weakening and exports stay pricey, that feeds into inflation.

The happy story, though, is that U.S. exports become cheaper abroad. So if you're a business owner that sells overseas, that could be good. Foreign buyers get more bang for their buck, which could boost your sales. But for those of us back home, a weaker dollar also means mounting inflation pressure. If the dollar keeps weakening and exports stay pricey, that feeds into inflation.

The happy story, though, is that U.S. exports become cheaper abroad. So if you're a business owner that sells overseas, that could be good. Foreign buyers get more bang for their buck, which could boost your sales. But for those of us back home, a weaker dollar also means mounting inflation pressure. If the dollar keeps weakening and exports stay pricey, that feeds into inflation.

You've probably heard this described as imported inflation. I want to double click on that last point because it's easy to confuse a weakening dollar with inflation, but they're not the exact same thing, even though they do go hand in hand. The value of the dollar is really contextual.

You've probably heard this described as imported inflation. I want to double click on that last point because it's easy to confuse a weakening dollar with inflation, but they're not the exact same thing, even though they do go hand in hand. The value of the dollar is really contextual.

You've probably heard this described as imported inflation. I want to double click on that last point because it's easy to confuse a weakening dollar with inflation, but they're not the exact same thing, even though they do go hand in hand. The value of the dollar is really contextual.

When you think about the value of the dollar, you're talking about how it stacks up against other currencies in the global market. So think one US dollar getting you few euro or yen. Inflation, on the other hand, measures how much more expensive goods and services are within the US economy itself.