The U.S. Dollar Is Down 10% Since The Start Of Trump’s Second Term — Here’s What That Means For Your Portfolio

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The U.S. dollar has dropped 10% since the beginning of President Donald Trump’s second term.

While a double-digit decline in a major currency often sparks fears of a global financial shift, a new report from the Brookings Institution suggests the dollar isn’t losing its “reserve currency” crown just yet.

According to the post by Senior Fellow Robin Brooks, the drop has been driven by “short, sharp bursts” of volatility linked to specific policy events:

• April 2025: A chaotic rollout of reciprocal tariffs.

• January 2026: Escalated rhetoric regarding Greenland during the Davos summit.

Despite the 10% slide, the data shows that central banks around the world — like those in China and Japan — are not dumping their dollars.

The International Monetary Fund‘s Currency Composition of Official Foreign Exchange Reserves data indicates that while the dollar is weaker, there are no viable alternatives.

The euro has failed to gain ground, and the Chinese yuan has seen its share of global reserves decrease during this period.

The report concludes that the 10% drop is likely “benign,” meaning it’s driven by standard economic expectations and interest rates rather than a fundamental collapse of the U.S. financial system.

A weaker dollar creates both winners and losers in the stock market:

• Winners: U.S.  Multinationals
  Companies in the S&P 500 that sell products overseas benefit from a weaker dollar. When they convert their foreign sales back into USD, those earnings look much larger on their balance sheets.

• Winners: Commodities and Gold
  Gold, oil and copper are priced in dollars. When the dollar loses value, it typically takes more dollars to buy the same amount of the commodity, leading to higher prices for the assets. That inverse relationship is one reason gold has been among the strongest performing assets during the current period of dollar weakness, and why some investors are using physical gold specifically as a currency hedge rather than a growth bet. For those evaluating that move, Preserve Gold’s free Gold and Silver Investor Kit walks through how to approach physical gold as a portfolio allocation, what to look for in a provider, and how to avoid the pricing and fee pitfalls that are common in the industry.

• Losers: U.S. Consumers (Inflation)
  A weaker dollar makes imported goods — from electronics to cars — more expensive. This can lead to imported inflation, which might force the Federal Reserve to keep interest rates higher for longer.

The 10% drop is a significant move, but it appears to be a reaction to policy volatility rather than a sign that the world is moving away from the dollar. For investors, this environment favors international exposure and large-cap U.S. stocks with heavy overseas revenue.

It also favors assets that sit outside the dollar system entirely. Gold is priced in dollars but holds value independent of any single currency, which is precisely why central banks have been accumulating it at record pace even as they maintain dollar reserves.

For individual investors who want that same kind of insulation in their own portfolio or retirement account, physical gold held in a secure, IRS-approved depository carries no issuer risk, no fund structure risk and no dependence on market liquidity during periods of stress.

That is a different proposition than a gold ETF, and it is the distinction that matters most when currency volatility is the primary concern. Preserve Gold specializes in helping investors make that transition, whether through a direct purchase with insured home delivery or through an IRA rollover from a 401(k), 403(b) or traditional IRA, with transparent pricing, a zero-fee buyback policy and a dedicated specialist who stays available after the initial purchase.

For anyone wondering whether a dollar down 10% is a reason to look at physical gold, the free 2026 Gold and Silver Investor Kit from Preserve Gold could be the right starting point.

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