The broad trade-weighted dollar peaked at 124.1 in April 2025. As of May 2026 it sits at 118.8, down roughly 4.3% over thirteen months, with a low of 117.9 in February. The world's reserve currency has quietly handed back a chunk of its premium, and almost no one is talking about it.
This matters more than the size of the move suggests. A softer dollar loosens financial conditions everywhere at once. It lifts commodity prices in dollar terms, eases the debt-service burden on emerging-market borrowers who fund in dollars, and flatters the reported earnings of US multinationals. The dollar is the price of money for most of the planet, and it has been getting cheaper.
The level to watch is 117.9. A clean break below February's low would confirm a downtrend rather than the sideways drift of the past year. Hold above it, and this is just the dollar resting near the top of its range. As with the physical-economy signals I track, the level decides, not the narrative.