The US dollar has suffered its greatest fall in decades, with a 10.8% decline against a basket of currencies during the first half of 2025, marking its worst half-year performance since 1991. This sharp depreciation is largely attributed to the economic policies of Donald Trump, including his tariffs and the anticipated rise in national debt from his “big beautiful” budget bill. Investors are increasingly questioning the dollar’s long-held safe-haven role.
Unicredit analysts confirm the dollar’s 10% loss, contrasting it with the euro’s 5% gain. This shift in currency strength is also influenced by rising expectations of US interest rate cuts, a policy frequently advocated by Trump. Despite the dollar’s significant setback, the S&P 500 of US stocks remarkably rebounded to a record high by the end of June, suggesting that investor confidence in US equities has found new drivers, including strong AI-related earnings.