The Trump Administration is breaking from a long-standing, bipartisan policy of supporting a strong dollar.

The greenback has fallen against its peers by 2.7%, the worst start to a year since 1987, after Ronald Reagan engineered a decline in the dollar to combat a flood of Japanese imports.

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Data: Money.net; Chart: Andrew Witherspoon / Axios

Why it matters: Conventional wisdom used to dictate the a strong dollar was good for the U.S. because it helped American consumers buy imports. And a stronger dollar is the natural result of the greenback's reserve-currency status, which gives the U.S. geopolitical leverage. But the average American doesn't need cheap stuff as much as he needs a good-paying job, and a strong dollar disadvantages exporters.

Watch out: Reversing a strong-dollar policy could lead to countries competitively devaluing their currencies, and the return of higher inflation.

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