President Donald Trump said in April he said he thought the U.S. dollar was "getting too strong" and that its value needed to drop. It looks like he got his wish: The greenback has settled to a seven-month low against a basket of currencies this week -- and is down nearly 7 percent from its early January high (chart below).

Trump's comments broke a long tradition of presidents talking up the dollar as a matter of national pride, but they also were a departure for a few very real economic reasons.

A strong dollar keeps inflation low, keeps imports cheap and keeps a lid on energy prices. By conducting what's known in economic circles as a "verbal intervention" against the dollar, Trump was de facto engaging in the type of pro-trade mercantilism he has accused Beijing of doing.

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And while the dollar's decline has been relatively orderly so far, ongoing pressure would put its three-year-old trading range at risk. A breakdown in the greenback's value could have major consequences for the U.S. economy.

First, what's fueling this decline?

Mainly, a combination of a stalling economic data and fear in the currency and bond markets that the Federal Reserve could be making a monetary policy mistake by sticking to its rate hike schedule.

While another quarter-point hike is widely expected at the June policy meeting next week, the rates market is looking for just two more increases through the end of 2019, according to Bank of America Merrill Lynch analysts. Moreover, these traders are bracing for a "sharp slowdown in U.S. growth to trend or even below."

The economic data backs up this outlook, with the Citigroup Economic Surprise Index at two-year lows.

Currency traders are responding to this because capital flows to areas of the global economy that are growing the best. Thus, while the U.S. stock market has largely been treading water for the past three months -- except for very flashy strength in select mega-cap tech stocks like Amazon (AMZN) -- the MSCI World Index of non-U.S. stocks is up solidly (chart above).

Fed officials have been openly discussing not only another two hikes before year-end but also the beginning of an effort to draw down the central bank's $4 trillion-plus balance sheet swollen by years of bond-buying stimulus.

What lies ahead for consumers? The dollar's decline hasn't been meaningful enough so far to have a major impact. Import prices have been drifting higher slightly. Gold is perking up a little.

But a breakdown below the dollar's early 2016 lows could result in a more intense response from import and commodity prices, resulting in higher inflation, thinner profit margins for retailers and a decline in real wages for workers. The plus side would be a lift to export-oriented manufacturers and a possible narrowing of the trade balance.