On June 26, 2025, Peter Schiff brought attention to a financial trend with far-reaching consequences: the weakening of the U.S. dollar and its impact on global imports and asset values. Reported by Schiff via his social media commentary, the message was clear, American consumers are paying more for imported goods, not just due to inflation, but due to unfavorable currency exchange rates.
Since former President Donald Trump’s tenure, the dollar has depreciated notably against key global currencies. This has silently made everyday products more expensive for Americans, even without changes in base prices. A stronger euro, yen, pound, and franc mean higher costs for everything from Swiss watches to Japanese electronics. This silent inflation is increasingly pressing, yet it rarely enters mainstream discussions with the urgency it deserves.
Meanwhile, the crypto space is showing signs of regional divergence. Although Bitcoin is only slightly below its high in dollar terms, its value has dropped more significantly in euros. This difference plays a key role in why Bitcoin demand is fading in Europe, a region now experiencing both currency strength and reduced speculative interest in digital assets.
How Dollar Weakness Drives Up U.S. Import Costs
The euro exchange rate is now above $1.17, a level that directly increases the cost of European imports for American buyers. According to Peter Schiff, EU imports cost Americans 13% more today compared to when Trump took office, purely due to dollar weakness.
Swiss goods now cost 14% more, British products 12% more, and Japanese imports are up by 8%. These increases are not tied to producer inflation or supply chain issues, but solely to how many dollars it takes to buy a foreign currency. When the dollar weakens, Americans need to spend more to get the same value, making goods from abroad inherently more expensive.
This trend contributes to underlying consumer inflation in an understated manner. And even so, the Chairman of the Federal Reserve, Jerome Powell, does not appear to be telescoping exchange rate effects while crafting inflation expectations for the market. Failing to incorporate this variable could indicate an underestimation of inflationary pressures on consumer goods and services that are predominantly via imports.
Bitcoin’s Popularity Dips in Europe as Dollar and Crypto Slide
Although bitcoin has shown varying amounts of resilience against the dollar-denominated markets, euro-denominated bitcoin results tell a different tale. Schiff notes that bitcoin is currently only 4% below its all-time highs in dollars, but is nearly 14% below those same highs in euros. This huge deviation represents a lack of demand for bitcoin in euro-denominated markets.
If local currencies are performing strongly, speculative demand and value retention incentives turn bitcoin and other cryptocurrencies into less appealing investment vehicles. In the case of the United States, a weaker dollar might drive degenerate investors to decentralized assets, but with limited supply, locals will not experience that same sense of urgency. Instead, as the euro remains strong and inflation pressures stabilize, there is less incentive to exchange fiat for volatile digital alternatives.
Furthermore, this approach will persist. As the dollar remains weak and bitcoin struggles to regain its former significance as an investor asset in non-dollar currency markets, euro-denominated interest in bitcoin will remain subdued. Should these conditions continue or trend negatively, this could change drastically.
Why Exchange Rates Should Be Central to Inflation Forecasts
Currency exchange rates are not just issues for travelers and foreign exchange traders; they impact almost all dimensions of economic activity, particularly for economies like the U.S. that are heavy importers. A weaker dollar means imported inflation, or we’ll have to pay significantly more for goods and services that are brought in. Yet current discussions about monetary policy, including by organizations like the Federal Reserve, rarely treat dollar weakness as a significant issue.
This is a potentially dangerous situation because we may not be prepared for the next wave of inflation that depreciation may create. Additionally, our currency standing is not only a foreign currency matter, it affects foreign perceptions of confidence in U.S. markets, therefore it may drive or limit capital flows. For any American, and U.S. policymakers, that needs to realize is that exchange rates are not an incidental inconvenient economic phenomenon but is front and center in battle against inflation.
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