The US dollar has registered its worst first half in over 50 years, tumbling 10.8% against major currencies. This historic slump is a direct consequence of Donald Trump’s aggressive tariffs, the mounting US national debt, and his persistent pressure on the Federal Reserve to cut interest rates. The currency’s performance has been its poorest since 1973, with its index dropping to its lowest level since March 2022.
The instability has been a boon for other currencies, with the pound reaching a three-year high. While the dollar faced a significant sell-off, broader market returns remained strong. The S&P 500 index, despite initial turbulence, achieved a record high by the end of June. This surprising rally, even without significant material progress in trade negotiations, highlights investor speculation on the easing of trade tensions and the ongoing appeal of AI-driven earnings growth.