FXStreet reports that according to economists at Charles Schwab the downtrend in the US dollar, if it is sustained, is also potentially supportive to rising inflation. 

“We expect to see an uptick in inflation over the next few months, but it’s likely to be fleeting. On a year-over-year basis, inflation will likely tick higher.”

“When we look a few years down the road, the case for a move up in inflation grows stronger. The Fed’s easy monetary policy stance could lay the groundwork for higher average inflation than we’ve experienced for the past decade.”

“On a trade-weighted basis, the dollar had been rising for about 10 years until last spring when the Fed shifted to its very easy policy stance. We expect it to continue moving lower as a result of the decline in real interest rates in the US and rising external deficits that need to be financed with foreign capital. A weaker currency should provide some support for higher growth and inflation.”