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The US dollar is aimed at the worst first half of the year since 1973, as Donald Trump’s trade and economic policies are encouraging global investors to rethink their exposure to the world’s dominant currency.
The dollar index, which measures the currency’s strength against a basket of six others, including the pound, the euro and Chen, has so far fell more than 10 % in 2025, the worst start of the year since the end of the Bretton Woods system.
“The dollar has become a whip a boy from Trump’s unstable policies 2.0,” said Francesco Pesole, FF strategist at Ing.
Standing the president Tatruf wasHuge borrowing needs and concerns about the independence of the Federal Reserve have undermined the dollar’s attractiveness as a safe shelter for investors, he added.
The currency dropped by 0.3 % on Monday as the US Senate prepared to start Voting for changes to the “big, beautiful” tax on Trump’s tax.
Law legislation is expected to add $ 3.2m to US debt to the next decade and has fueled concern over Washington’s sustainability, causing exodus from the US Treasury Ministry.
The dollarThe sharp decline puts the course for the worst first half of the year of a 15 percent loss in 1973 and the weakest showing during any six -month period since 2009.
The currency slide has confused the widespread predictions at the beginning of the year that Trump’s trade war would do more damage to economies outside the United States while stimulating US inflation, strengthening the currency against its rivals.
Instead, the euro, which several banks on Wall Street predicted that it would fall on parity with the dollar this year, rose 13 % to over $ 1.17, as investors focused on growth risks in the world’s largest economy – as demand increased for safe funds elsewhere, such as German bonds.
“You had a shock on the day of liberation, in terms of the framework of US politics,” said Andrew Boles, Chief Investment Officer for Global Fixed Income at Bond Group Pimko, referring to Trump’s “reciprocal tariffs” in April.
There was no significant threat to the status of the dollar, as de facto reserve currency in the world, the balls claim. But that “doesn’t mean you can’t have a significant weight loss in the US dollar,” he added, pointing out the change among global investors to protect more from their exposure to the dollar, an activity that drives itself to the green.
Also pressing the dollar lower this year rising expectations That the Fed will reduce rates more aggressively to support the US economy-induced Trump-with at least five quarter-points reductions expected by the end of next year, according to levels that include futures contracts.
Lower rates renewal have helped US actions avoid concerns about the trade war and the Middle East conflict to reach record heights. But the weaker dollar means that the S&P 500 continues to lag far behind rivals in Europe when yields are measured in the same currency.
Major investors from pension funds to central bank reserves have said their desire to reduce their exposure to the dollar and US funds and wonder if the currency is still providing shelter from market changes.
“Foreign investors are demanding greater preservation of funds denominated by the dollar and that is another factor that prevents the dollar from monitoring US capital,” Pesole told Ing.
Gold It has also reached record highs this year of continuous purchase by central banks and other investors concerned about the devaluation of their dollar assets.
The collapse of the dollar took it to the weakest level against rival currencies for more than three years. Given the speed of the fall and the popularity of the Dollar, some analysts expect the currency to stabilize.
“The weak dollar has become a crowded trade and I suspect the pace of decline will slow down,” said Guy Miller, the chief strategist at the Zurich Insurance Group.
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