Both Donald Trump and JD Vance have expressed a desire to weaken the dollar, but deliberate efforts to achieve this look unlikely to succeed:

Fiscal tightening, which could weaken growth and lower relative interest rates, appears improbable given the incoming administration’s focus on tax cuts and sustained government spending. 

The Federal Reserve is legally and structurally insulated against interference, making it unlikely to depress interest rates at the president’s behest. Further, any serious threat to the central bank’s independence is highly likely to drive market inflation expectations and long-term interest rates higher, offsetting any negative impact on the dollar. 

Unilateral currency intervention has a poor record of success, and faces severe limitations in China, where a closed capital account and an activist central bank constrain the extent to which foreigners can acquire yuan-denominated assets. 

Lastly, although a multilateral agreement akin to the 1985 Plaza Accord—a coordinated depreciation of the dollar—might help rebalance the global economy away from its reliance on American demand, this would require Trump to abandon key aspects of his policy agenda. Foreign leaders—especially in export-dependent countries—would likely demand a painful fiscal adjustment and a lowering of tariffs in return.

The dollar’s value remains elevated.
Federal Reserve trade-weighted dollar indices
March 1973 – August 2024