The currency dynamics are evolving at a rapid pace, with the US dollar stealing the spotlight as of late due to its consistent weakening stance. The US dollar is now an active victim of the rising de-dollarization narratives, where countries are now considering finding competitive alternatives to replace the USD, tired and weary of its weaponized structure and forms. In this wake, new research has confirmed how the US dollar’s decline and collapse have officially begun in efforts to derail the reserve asset further away.
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What Does This New Research Say About the US Dollar Decline?
Per a recent post by Bragos Research, the US dollar “collapse” has begun. Speaking in detail on X, the post outlined how the US dollar is facing intense selling pressure and has noted its biggest drop since Covid in 2020. At the same time, the post outlined how the purchasing power of the USD has also significantly declined as compared to other currencies.
“Something has just broken on the US dollar. The DXY just posted its biggest drop since COVID. And it’s now completely disconnected from its fundamental currencies. Since the dawn of civilization, every fiat currency has eventually collapsed into irrelevance. And when that collapse comes, those holding the currency usually see their wealth wiped out. History is clear about how this ends. Take the British pound, for example. In the 1940s, £1 was worth $5. It was the world’s dominant currency. By the 1980s, £1 was worth just $1. That collapse destroyed the purchasing power of its holders. And reshaped global trade, economic power, and geopolitics.”
In addition to this, the research shared how the US dollar may be on the brink of a possible collapse as USD selling pressure intensifies in global markets. At the same time, the fiery Trump trade policies might just ignite the “fuse” of this collapse, leading the USD to burst and crack open in space.
“Today, it’s not the British pound under pressure; it’s the US dollar. Still the world’s dominant currency, but now some are projecting a similar decline ahead. And Donald Trump’s proposed government policies could be the spark that lights the fuse. Find out our exact trading strategy for these conditions at The US dollar index (DXY) has faced heavy selling pressure since April 2nd (Liberation Day), when Trump announced new tariffs. Now, it’s not been an outright collapse, but something has happened that is suggesting this decline in the US dollar could be a lot more dangerous than it looks.”
6/ The US dollar index (DXY) has faced heavy selling pressure since April 2nd (Liberation Day) when Trump announced new tariffs
— Bravos Research (@bravosresearch) May 12, 2025
Now, it's not been an outright collapse, but something has happened that is suggesting this decline in the US dollar could be a lot more dangerous than… pic.twitter.com/3EWgS3Wp1C
What’s Happening to USD?
Drawing another analysis, Bravos Research shared how the USD is breaking its connection with US bond yields, a move that can dismantle the US economy and markets.
“You see, DXY usually moves in sync with US bond yields. This reflects the return on holding US dollars. That relationship makes sense: as yields rise, the dollar should strengthen. But for the first time in years, that connection is starting to break. The chart now shows the dollar weakening despite high yields. That’s a serious warning sign. It suggests 1 of 2 things: either interest rates must rise even more to stabilize the dollar. Or the dollar is at real risk of a steeper collapse.”
8/ The chart now shows the dollar weakening despite high yields
— Bravos Research (@bravosresearch) May 12, 2025
That’s a serious warning sign
It suggests 1 of 2 things:
Either interest rates must rise even more to stabilize the dollar
Or the dollar is at real risk of a steeper collapse pic.twitter.com/gOL7jg8gwP
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Trump’s Tariffs Could Spur Reduced Dollar Demand
Another worrying aspect for the US economy is how Trump’s aggressive tariff policies are reducing the demand for the American currency. Bravo’s research outlined how Trump’s fiery trading stance is “shrinking” global trade volumes, affecting the USD’s demand in the process. This development may trigger de-dollarization narratives to gain pace globally again.
“Trump’s tariff policy could shrink global trade volumes. And since most global trade is conducted in dollars, falling trade activity directly reduces demand for dollars. If this happens, the US dollar’s downtrend could become a long-term theme.”
11/ Trump’s tariff policy could shrink global trade volumes
— Bravos Research (@bravosresearch) May 12, 2025
And since most global trade is conducted in dollars, falling trade activity directly reduces demand for dollars
If this happens, the US dollar’s downtrend could become a long-term theme
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