The US dollar has hit rock bottom, experiencing its worst first half in over 50 years. A 10.8% drop against a basket of currencies since the start of 2025 has eroded its safe-haven appeal, largely due to Donald Trump’s trade war and mounting concerns over the US national debt. The dollar index is now at its lowest point since March 2022.
The pound has soared to a three-year high against the weakened dollar. Carsten Brzeski of ING Research described the first half as “action-packed,” marked by tariffs, market volatility, and questions about Fed independence. While the dollar struggled, US and European markets weakened in March but staged a significant recovery in April, with the S&P 500 reaching a record high by June’s end, demonstrating investors’ willingness to re-engage with risky assets despite ongoing uncertainties.