The global trading partners also have a stake in the precarious USD

While a weaker USD could have the positive effect of helping U.S. exports catch up with imports, it would lessen the appeal of foreign investment in dollar-denominated assets. Even so, the U.S. remains the world’s largest market for foreign exports, the U.S. dollar is still the most widely held
reserve currency, and U.S. exports continue to be the main engine of growth for overseas markets.

Central bank intervention could be undertaken to prevent a dollar slide, as foreigners attempt to maintain their exports to the U.S. The last time an international monetary crisis of this sort occurred was in the 1980s, when the U.S. brokered the Plaza Accord to stem further increases in the dollar, which subsequently lost half its value against the yen and the mark within a two-year period. Conditions were very different then, with foreigners concerned about inflationary growth rather than the sluggish demand outlook they now face.

A weak-dollar policy would also have domestic effects, dampening growth in private U.S. consumption. Given the importance of consumer spending and today’s uncommonly high levels of personal debt, a spike in interest rates could have serious consequences, offsetting the benefits of improved trade import/export levels. The dollar’s fall, depending upon how fast and how hard, could significantly impact U.S. purchasing power, both here and abroad.