Dollar’s Dive Deepens: US Currency Faces Fallout from Trump’s Economic Plans

The US dollar’s dive has deepened, as the currency faces significant fallout from Donald Trump’s economic plans. Its 10.8% decline against a basket of currencies in the first half of 2025 marks its worst performance in over 50 years, primarily due to concerns about tariffs and rising national debt, which undermine the dollar’s safe-haven appeal.
Unicredit analysts highlight the dollar’s 10% loss, while the euro has seen a 5% gain. Chris Iggo of Axa IM Investment Institute noted strong broader market returns despite the dollar’s weakness, with risky assets quickly reversing any sell-offs. The S&P 500, after initial turbulence, impressively surged to a record high by the end of June, indicating that while the currency faces headwinds, other segments of the market are finding strength, driven partly by AI investments and anticipation of Fed rate cuts.