Dollar’s Deep Dive: Currency Loses 10.8% in H1 Amidst Policy Fears

The US dollar has taken a deep dive, losing 10.8% against a basket of currencies in the first half of 2025. This significant decline, marking its worst performance since 1973, is primarily due to investor fears surrounding Donald Trump’s economic policies, including his tariffs and the anticipated increase in national debt. The dollar’s safe-haven role is increasingly under scrutiny.
The pound has climbed to a three-year high against the struggling dollar. Carsten Brzeski of ING Research described the first six months as “action-packed,” marked by tariffs, market volatility, and questions about Fed independence. Despite the dollar’s substantial struggles, US stock markets, after an early April global sell-off triggered by “Liberation Day” tariffs, staged a historic rebound, pushing the S&P 500 to a record high by June’s end, demonstrating market resilience.