The American dollar, as mentioned, is currently at its worst phase in the past 52 years, recording a 10.7% drop in the first half of 2025.
This is the biggest decline since 1973, when the gold standard was officially abandoned. The DXY index, which measures the value of the dollar against a basket of six major currencies (euro, yen, pound, Canadian dollar, krona, franc), has fallen below 100 points. The exchange rate with the euro has jumped to 1.17.
WHY IS THE DOLLAR FALLING?
There are three main reasons:
The FED's monetary policy: Markets are pricing in new interest rate cuts, which increases the supply of dollars in the market and lowers its value. The cheaper money gets, the more easily it circulates—and the more its value drops.
The ballooning debt and deficits: U.S. public debt is nearing $38 trillion, with this year’s deficit heading toward $2 trillion.
These numbers scare investors and weaken global confidence in the dollar, as they raise fears of inflationary pressure and concerns about the stability of the currency’s value.
Geopolitical tensions and Trump’s policies: With 78 executive orders in a single day and an aggressive stance on international trade, Trump is creating a climate of uncertainty and volatility that drives capital outflows. Many investors are pulling out of the U.S. and moving their money to Europe or safe havens like gold.
OPPORTUNITY
And now the critical question:
Is this a problem for us in Europe?
The answer is: Not only is it not a problem—it’s an investment opportunity!
Yes, you heard right. For us who live and earn in euros, this fall of the dollar is a gift. Because quite simply, with the same euros, we can now buy more dollars.
It’s like entering the U.S. stock market with a 12% discount.
Those of us who invest monthly in US ETFs, whether directly in dollars or through the European version, are essentially doing DCA (Dollar Cost Averaging) on the exchange rate as well. That means we’re buying more dollars every month at increasingly lower prices. And this means our average cost is dropping, as we’re investing “cheaper” each time.
And when the dollar strengthens again?
We’ll profit twice:
From the recovery of the dollar, and
From the long-term rise of the S&P 500.
This isn’t theory—it’s math. And it’s the weapon of patient investors.
Because that way, we can build much larger positions in U.S. assets, using our strong euro. The power of compounding will work in our favor, and the future strengthening of the dollar will multiply the returns.
