Fact Check: "The US dollar is primed to weaken further."
What We Know
The claim that "the US dollar is primed to weaken further" is supported by various economic indicators and forecasts. According to a Reuters poll of foreign exchange analysts, the U.S. dollar is expected to remain under pressure due to factors such as increasing U.S. debt and expectations of interest rate cuts by the Federal Reserve. The U.S. current-account deficit also widened significantly, increasing by 44.3% to $450.2 billion in the first quarter of 2025, as reported by the U.S. Bureau of Economic Analysis.
Conversely, some analysts predict that the dollar's strength may stabilize or even persist into 2025. A report from J.P. Morgan suggests that economic growth differentials could support the dollar, projecting a growth rate of 2.7% for the U.S. economy. Additionally, a Deloitte economic forecast indicates that while there may be softening economic data, the 10-year treasury yield is expected to hover around 4.5%, which could provide some support for the dollar.
Analysis
The evidence surrounding the claim is mixed, indicating a complex economic landscape. On one hand, the Reuters poll highlights significant concerns about the dollar's future, primarily driven by fiscal challenges and monetary policy shifts. The widening current-account deficit could signal underlying weaknesses in the U.S. economy, which typically exerts downward pressure on the currency.
On the other hand, the J.P. Morgan report and the Deloitte forecast present a more optimistic view, suggesting that the dollar may not weaken as much as some analysts predict. These sources highlight potential economic growth and stable treasury yields as factors that could bolster the dollar's value.
The reliability of these sources varies. The U.S. Bureau of Economic Analysis is a reputable government agency providing official economic statistics, making its data highly credible. In contrast, financial news outlets like Reuters and J.P. Morgan, while generally reliable, may have biases based on market positions and economic outlooks that could influence their reporting.
Conclusion
The claim that "the US dollar is primed to weaken further" remains Unverified. While there are credible indicators suggesting potential weakness, there are also significant forecasts that predict stability or even strength in the dollar. The economic situation is fluid, and various factors could influence the dollar's trajectory in the coming months.
Sources
- Summary of Economic Projections, June 18, 2025
- U.S. Bureau of Economic Analysis (BEA)
- U.S. dollar to stay under pressure from tariff, debt and rate ...
- Where is the U.S. dollar headed in 2025?
- United States Economic Forecast Q2 2025
- US Dollar Posts Worst First Half in 50 Years. Forecast as of ...
- Will the Dollar Go Up in 2025? Here's What the USD Forecast Says
- 2025 Mid-Year Outlook: U.S. Stocks and Economy