Last Updated on January 29, 2026 by Deon
As silver takes off to never before seen highs, its natural nemesis — the US Dollar – is feeling a bit on its heels. A decade of weak dollar dominance, and the greenback has tumbled to its lowest level in four years as we entered 2026… Leading some investors to speculate that the “king of currencies” is losing his crown.
Here’s why the dollar is losing momentum — and what it means for the global economy.
The “Weak Dollar” Directive
The most direct shock to the market originated in Washington itself. In a surprising turn, the administration has suggested that it may prefer a weaker dollar to help American exports and manufacturing.
Presidential Rhetoric: Recent statements dismissing the dollar’s fall as “good” for business have traders running for the exits.
The Export Edge A weaker dollar makes American goods less expensive to foreign buyers, but also underlines a break from the “Strong Dollar Policy” of the past few decades.
Fed Independence in the Crosshairs
The Federal Reserve, the bedrock of the global financial system, is under political attack as never before.
The Rate-Cut Tug-of-War: The Fed says its ideal rate would be “neutral,” where inflation remains tame, but the political pressure to slash rates further and help stimulate growth has cast a pall.
Leadership Transition: It’s rare for emerging markets, not the world’s reserve currency.
The Great Diversification (De-Dollarization)
The world is searching for alternatives in a way it hasn’t since the end of World War II. This is not just talk; the numbers are moving.
Going the Wrong Way on Reserves: The dollar’s share of global foreign exchange reserves has fallen to about 57 percent from more than 70 percent in the early 2000s.
Enter Stage the “Others”: Central banks are now diversifying into Euro, Swiss francs and the most stunning of all- Gold and Silver.
Bilateral Trade: From “petroyuan” deals to regional payment systems in the BRICS+ bloc, there is more trade taking place without a U.S. greenback changing hands.
The Debt Ceiling Shadow
The US debt limit’s return in early 2025 has become a chronic headache for 2026. The recurring threat of fiscal paralysis has diminished the “safe-haven” appeal of US Treasuries. But when investors no longer trust in the reliability of what is meant to be the world’s benchmark asset, they stop buying the currency they need to hold it.
The Verdict: A Pullback or a Structural Shift?
Most forecasters treat 2026 as a tale of two years. The dollar may be down at the moment, but some analysts are predicting a rebound in the second half of 2019 as rising trade tariffs and fiscal stimulus could reignite inflation that eventually will leave the Fed standing above its rivals, they say.
“The world is heading toward a multipolar currency world,” says one strategist. “The dollar is not dying, but it is learning to share the stage.”
