In President Donald Trump’s first 100 days in the White House for his second term, the dollar has weakened 9%, according to Bloomberg.
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While this may seem like bad news, there are also downsides to a strong dollar. For instance, global demand for goods made in the United States can decrease if consumers in other countries can’t afford to buy them and American workers could then be impacted, per CNBC.
On the other hand, a weaker dollar may benefit consumers in the U.S. Here’s a look at some ways that could happen.
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More Jobs and Lower Prices
“All in all, a weaker dollar can make our economy tougher, giving real benefits to those who shift their spending and investing ways,” said Ben Mizes, an investing expert and co-founder of Clever Real Estate.
“When the dollar dropped in 2020, more jobs popped up in the U.S. because our stuff seemed cheaper and better to both people here and others around the world,” Mizes explained. “For folks buying things, this could mean not worrying so much about work or finding new jobs, especially in places that make stuff, farm or welcome tourists.”
Mizes added that buying stuff made nearby might also help consumers save some money since things from far away could cost more. He said this helps local businesses grow.
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Cheaper Travel Experiences
Perhaps a weaker dollar could benefit your travel plans.
“Since traveling abroad can become more expensive with a weaker dollar, I’ve found amazing deals at U.S. destinations,” said Andrew Lokenauth, a money and investing expert. “Hotels and attractions get hungry for domestic tourists.”
Additional Investment Opportunities
According to Marguerita Cheng, a certified financial planner and an ambassador for the Institute for Divorce Financial Analysts (IDFA), here are some ways investors could benefit from a weaker dollar:
Invest in foreign companies or American companies that earn substantial revenue from outside of the U.S.
Invest in currency ETFs that have exposure to a single currency or a basket of currencies.
Invest in the stock market indexes of countries whose currencies you believe will appreciate relative to the dollar.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
Bloomberg, “Trump’s First 100 Days: A Weak Dollar.”
CNBC, “Why a weakening U.S. dollar can help the consumer.”
Ben Mizes, Clever Real Estate
Andrew Lokenauth
Marguerita Cheng, Institute for Divorce Financial Analysts (IDFA)
This article originally appeared on GOBankingRates.com: Trump Economy: 3 Ways a Weaker Dollar Could Actually Benefit You
