US Dollar Suffers Worst First Half Performance Since 1973 As Trump Tariffs Bite

The American dollar has plummeted more than 10% against a basket of global currencies in what analysts are calling the most significant decline for the first half of any year since 1973. This dramatic shift in the currency markets has been largely attributed to Donald Trump’s controversial trade policies and mounting geopolitical tensions.

The steep decline has pushed the dollar index to levels not witnessed since March 2022, simultaneously propelling the British pound to a remarkable three-year peak of $1.37, marking a substantial increase from its $1.25 position at the year’s outset. Market observers point to growing investor concerns regarding the safe-haven status of US dollar-denominated assets, particularly as Trump’s economic strategies continue to raise eyebrows.

Unicredit analysts have highlighted the dollar’s position as “the most notable loser” in 2025, with the currency shedding 10% of its value against major competitors. The euro, conversely, has demonstrated impressive resilience, gaining 5% during the same period. Trade Nation’s senior market analyst, David Morrison, attributes this decline to Trump’s aggressive tariff policies and what many perceive as administrative chaos.

The currency’s weakness has been further exacerbated by mounting expectations of US interest rate cuts, a situation complicated by Trump’s persistent criticism of Federal Reserve Chair Jerome Powell. The president’s hints at Powell’s potential replacement have only served to intensify market uncertainty.

Stock markets have experienced significant volatility throughout 2025, though most indices have managed to post gains. The S&P 500’s modest 5% increase has been overshadowed by more robust performances from European markets, with Germany’s DAX surging 20% and the UK’s FTSE 100 achieving a respectable 7.2% gain.

The broader impact of this currency decline has reverberated through global markets, with gold emerging as a notable beneficiary, recording a 25% price increase as investors seek safer havens amidst growing economic uncertainty. This shift in market dynamics suggests a potentially transformative period ahead for global financial markets.