The US dollar has plunged, recording its worst first half-year in over 50 years, with a 10.8% decline against a basket of currencies. This significant drop is a direct result of Donald Trump’s tariffs and mounting concerns over the US national debt, which together have rocked the foundation of the US currency’s safe-haven appeal.
The pound has risen to a three-year high against the struggling dollar. Carsten Brzeski of ING Research described the first six months as “action-packed,” with tariffs, market volatility, and questions about Fed independence. Despite the dollar’s severe struggles, US stock markets, after an initial downturn triggered by “Liberation Day” tariffs, staged a historic rebound, with the S&P 500 reaching a record high by June’s end. This underscores the market’s adaptability and willingness to bet on policy reversals.