What a Weaker Dollar Means for Businesses and the World

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Luke Vargas (0:34)

What a sliding US dollar means for businesses in the world. Plus, a big day for chip stocks as AI spending booms, and a pair of Middle East leaders say they won't help the US with a possible strike on Iran, as allies reconsider ties with Washington.

Jared Malson (0:51)

Both the Iranian and the Israeli strikes on Doha in Qatar really frightened a lot of leaders in the region and led them to question whether they can rely on the US for their security.

Luke Vargas (1:02)

It's Wednesday, January 28th. I'm Luke Vargas for The Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today. The US dollar is steadying this morning after sliding yesterday in the biggest one-day decline since April's global tariff turmoil. Stock futures are also gaining ahead of the Federal Reserve's interest rate decision today, where the central bank is expected to hold rates steady after three consecutive cuts. Here's Journal Finance Editor Alex Frangos.

Alex Frangos (1:38)

The dollar fell yesterday and has been falling pretty much since Donald Trump came into office a year ago, but took another leg down in the beginning of this year, and it's now at a four-year low against other major currencies like the euro, the pound, the Swiss franc, the Australian dollar, the Chinese yuan. It's a really interesting backdrop. We got the Fed meeting. The Fed's not expected to do anything, but it has been cutting rates and that plays into dollar weakness when the Fed is cutting interest rates that makes it slightly less attractive to own dollars. That's part of it, but the bigger thing that economists and currency traders are talking about is the geopolitics.

We start at the year with Venezuela, with Greenland, threats of new tariffs against Canada, Korea, and all these things are very destabilizing.

Luke Vargas (2:22)

Speaking in Iowa yesterday, President Trump said he wasn't concerned about the dollar, and Alex said that Fed in to Wall Street speculation that he wouldn't mind a weaker currency, which could boost US manufacturing and exports.

Alex Frangos (2:34)

To be clear, the dollar has fallen, but it's still relatively strong in historical terms, and for the dollar to fall a little bit, but that's actually stimulative for the economy. It makes our exports more attractive to overseas buyers. A lot of American companies make a lot of money abroad, and when the dollar weakens, their profits abroad go up, and it flatters the bottom line, so that can actually be really good for stocks. That's partly why I think the president said he's fine with it. It's just very unusual for a president or even a treasury secretary to give any indication of what they care about the dollar for decades, the policy among Democrats and Republicans in office was, we have a strong dollar policy and we don't comment on it.

Luke Vargas (3:17)

Japan's SoftBank is in talks to invest a further $30 billion in OpenAI, adding to its more than 10% stake in the startup. It comes as the maker of ChatGPT is looking to raise $100 billion by the end of the first quarter in order to help fuel its growth plans. News Corp, the owner of The Wall Street Journal, has a content licensing partnership with OpenAI. Well, growth is also on the mind of chip giant, NVIDIA, which today got the green light from China to sell its first batch of H200 chips to Chinese tech giants like Alibaba and ByteDance. The first approval covers several hundred thousand H200 chips worth around $10 billion, with Chinese authorities expected to rubber stamp more imports of the advanced chips in the coming months. And NVIDIA's success has been a boon for suppliers, like memory chip maker SK Hynix, which this morning posted record earnings for the final quarter of 2025 That echoes bumper growth for Europe's largest listed company, ASML. It said that orders for its chip making equipment exceeded expectations, and a sign that clients like TSMC continue to spend big on the semiconductors powering the AI boom in spite of fears of a market bubble.

Two US allies in the Middle East have ruled out the use of their airspace and territory for a potential attack on Iran. Journal correspondent Jared Malson says the announcements from Saudi Arabia and the United Arab Emirates are a foreign policy setback for the Trump administration.