The US dollar is in dire straits, experiencing its worst performance in decades, with a 10.8% decline against a basket of currencies in the first half of 2025. Donald Trump’s tariffs are biting hard, and concerns about their economic fallout, coupled with rising national debt, are eroding the dollar’s traditional safe-haven role.
Unicredit analysts confirm the dollar’s 10% loss, while the euro has seen a 5% gain. Chris Iggo of Axa IM Investment Institute noted strong broader market returns despite the dollar’s weakness, with risky assets quickly reversing any sell-offs. The S&P 500, after initial turbulence, impressively surged to a record high by the end of June, indicating that while the currency faces headwinds, other segments of the market are finding strength, driven partly by AI investments and anticipation of Fed rate cuts.