Goldman Sachs forecasts further decline of the US dollar

The US dollar, already weakened by tariff uncertainty and recession fears, is likely to continue falling, according to Goldman Sachs chief economist Jan Hatzius.

In April, the US currency fell more than 4.5%, posting its biggest monthly drop since the end of 2022. This prompted speculation of a crisis of confidence in the world's leading reserve currency.

Meanwhile, since the start of 2025 the dollar has fallen 8% against a basket of other major currencies. According to Hatzius, further decline is likely to intensify price pressures, while inflation is speeding up under the influence of tariffs.

In an article for the Financial Times, Hatzius writes that a weaker dollar could potentially reduce the US trade deficit and protect the economy from recession. However, as he warns, the factors causing dollar weakening can nullify the positive effect of a weaker currency for the financial environment.

In his assessments, the expert relies on historical data. As he notes, in two periods of similar dynamics of the dollar rate to the current one–in the mid-1980s and in the early 2000s–it eventually depreciated by 25–30%.