The U.S. dollar continues to weaken and has suffered its worst decline in 52 years, adding pressure to stocks such as Nvidia (NVDA), Apple (AAPL), and Meta Platforms (META), among many others.
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The greenback, as the American currency is known, has fallen 10.7% against a basket of other currencies, marking the worst first half to any year since 1973. The decline in the early 1970s occurred as the U.S. abandoned the gold standard and decided to let the dollar float rather than peg it to the price of bullion.
Now, analysts and currency traders say the U.S. dollar faces a variety of headwinds heading into the second half of this year that could result in further declines. Erratic policies, tariff volatility, rising debt and deficits, and potential interest rate cuts from the U.S. Federal Reserve could all conspire to push the American dollar lower in coming months.
Loss of Confidence?
Some analysts say that the decline in the greenback reflects a growing loss of confidence in the U.S. around the world. The dollar’s decline began in mid-January on the eve of U.S. President Donald Trump’s second term and has continued to slide lower throughout this year.
A weaker dollar does help make American exports cheaper and can provide a boost to U.S. companies amid President Trump’s ongoing trade wars. However, there are growing concerns about the potential end of American exceptionalism and dollar hegemony, with the public share of U.S. debt nearing $30 trillion and the 2025 deficit on track to reach $2 trillion.
Should American assets such as the dollar lose their prominence, it would have a big impact on risk assets like stocks. As the U.S. dollar slides lower, gold is off to its best first half to any year since 1979. Central banks around the world are ramping up their gold purchases to the tune of about 24 tons per month, according to the World Gold Council. Gold is viewed as an alternative to U.S. assets.
Is NVDA Stock a Buy?
The stock of Nvidia has a consensus Strong Buy rating among 40 Wall Street analysts. That rating is based on 35 Buy, four Hold, and one Sell recommendations assigned in the last three months. The average NVDA price target of $175.97 implies 10.44% upside from current levels.
