Greenback in Crisis: Dollar Suffers Worst H1 Since 1973 Amidst Trade War Fears

The US dollar has recorded its most dismal first-half performance in over 50 years, shedding 10.8% of its value against a basket of currencies. This sharp decline, unprecedented since 1973, is directly linked to President Donald Trump’s aggressive trade policies and the resulting economic uncertainty. The “big beautiful” budget bill, forecasted to dramatically increase the US national debt, further fuels investor apprehension about the dollar’s stability.
Market analysts, including those from Unicredit and Trade Nation, highlight Trump’s tariffs and the perceived chaos of his administration as primary drivers behind the dollar’s fall from grace. Concurrently, rising expectations of US interest rate cuts, pushed by Trump’s persistent critiques of the Federal Reserve, have also weakened the currency. While the dollar struggled, the euro saw a respectable 5% gain. Despite the currency’s woes, US stock markets, after a volatile period, managed to rebound, with the S&P 500 reaching a new record by June’s end.