A Half-Century Low: US Dollar Reels From Trade War and Fiscal Fears

The US dollar has plummeted to a half-century low, reeling from the combined impact of Donald Trump’s trade war and growing fiscal fears. Its 10.8% decline against a basket of currencies during the first half of 2025 marks its worst performance since 1973. Investors are actively divesting from dollar-denominated assets, citing concerns that Trump’s policies threaten the currency’s safe-haven status.
Unicredit analysts confirm the dollar’s 10% loss, with the euro gaining 5%. David Morrison of Trade Nation emphasizes the “chaotic” perception of the Trump administration and national debt concerns as key drivers. Despite the dollar’s woes, US stock markets showed remarkable resilience. The S&P 500, after a turbulent start, managed to reach a record high by the end of June, demonstrating a market that, while reactive to policy, also finds underlying strength in areas like technology and AI.