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The U.S. dollar—once a cornerstone of America’s economic power—is experiencing its weakest beginning to the year since 1973.
The fluctuating trade and economic strategies of President Trump have led investors to offload what remains the leading global currency.
In 2025 so far, the U.S. Dollar Index—which measures the value of the dollar relative to key global currencies such as the euro and British pound—has fallen by over 10%.
That represents the steepest decline in the first half since the downfall of the gold-linked Bretton Woods agreement over five decades ago triggered a 15% drop in the value of the U.S. currency.
This marks the dollar’s lowest performance over any half-year period since the 2009 financial crisis.
"The U.S. currency has turned into the scapegoat for the unpredictable measures under Trump 2.0," said Francesco Pesole, a foreign exchange strategist at ING. told the Financial Times .
For years regarded as a reliable refuge worldwide, the U.S. dollar is beginning to lose its appeal as investors respond to changing conditions. administration's unpredictable tariffs , the US's ballooning federal debt , and Trump's Assaults on the central banking system of the United States .
The dollar fell an additional 0.2 percent early Monday as the Senate readied itself for votes on proposed changes to Trump’s major piece of upcoming legislation—referred to as the “big beautiful bill”—expected to increase the country’s total debt by $3.2 trillion within ten years.
The legislation has sparked significant worries regarding national debt levels, prompting many investors to shy away from purchasing U.S. government securities as a result.
The weakening of the dollar goes against forecasts that numerous experts had anticipated when Trump began his second presidential term.
Trump's looming trade conflict was broadly anticipated by Wall Street to harm foreign economies and increase... inflation At home, policies aim to bolster the U.S. economy and increase the value of the dollar relative to foreign currencies.
"You experienced a significant surprise regarding Liberation Day and the broader U.S. policy landscape," said Andrew Balls from investment firm Pimco, according to remarks reported in the Financial Times.
Although Balls contended that the U.S. dollar would remain the global reserve currency, he noted this "does not imply that a substantial decline isn't possible."
The dollar is additionally weakening due to anticipation that the Federal Reserve will reduce interest rates.
Trump has placed heavy pressure on Federal Reserve Chair Jerome Powell to reduce interest rates more quickly, and has even proposed the appointment of an interim chairperson set to replace Powell by the conclusion of his tenure next May.
seen as crucial for maintaining economic stability.
viewed as essential for maintaining market equilibrium
considered vital to sustaining economic steadiness
regarded as crucial for ensuring financial system resilience
perceived as fundamental to upholding stable trading conditions
recognized as key to preventing disruptions in commerce
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Last week, a White House representative stated, 'The administration is currently setting the stage—including through The One, Big, Beautiful Bill—to accelerate economic expansion, employment gains, and increased investments. It’s well past time for monetary policy to align with this initiative and assist in driving forward America’s renewed economic strength.'
Markets react not only to formal Federal Reserve announcements but also to indications of potential future actions, implying that conflicting messages might lead to instability.
"You’ll end up with two individuals attempting to guide the vessel: one who’s actively navigating it and another playing the role of the backseat driver," said Ryan Sweet, senior U.S. economist at Oxford Economics, according to Reuters.
A fresh Federal Reserve Chair perceived as being influenced by Trump would similarly alarm Wall Street.
"Whoever gets selected, the main point to watch will be how their appointment is viewed—specifically whether they're seen as politically motivated," said Eric Winograd, senior U.S. economist at AllianceBernstein, speaking to Reuters.
And by that, I'm referring to someone who adjusts their opinions based on the president's shifting moods.
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