It has been the worst six months of the US dollar since 333, as President Donald Trump’s economic policies have motivated global investors to sell greenback holding and threatened the “safe-go” status of the currency.
In the first half of the 225, the dollar index measuring the power of the currency compared to the other six baskets, including the pounds, the euro and the yen.
By President Trump’s Stop-start tariff warAnd his attacks that have created anxiety Federal Reserve’s independenceThe dollar appeal is weakened as a safe bet. Economists are also concerned about Trump’s “big, beautiful” tax bill, currently in the US Congress.
This important law is expected to add billions of dollars to the US debt piles in the coming decade and expressed concern about Washington’s debt sustainable, and motivated to refugees from the US Treasury Market.
Meanwhile, gold has reached a record high this year. Central banks are concerned about devaluation of their dollars property.
What happened to the dollar?
On April 2, the Trump administration unveiled rates on imports in most countries of the world, believing in the world’s largest economy and A. Sale In the US financial property.
According to Trump’s declaration of rates, the Benchmark SP PD P500 index was erased more than $ 5 trillion from the value of shares in the Benchmark SP P500 index. Also seen the US Treasures Clear-outIt is more than reducing their cost and sending a loan cost to the US government.
Trump declared to face revolt in the financial market Give a 90-day pause At rates, excluding exports ChinaApril April. Trade with China’s second largest economy in stress-world- EasierInvestors are careful about keeping dollars associated with dollars.
Last month, the Economic Co-operation and Development Organization (OECD) declared that the US growth of this year has decreased from 8.5 per cent to 8.6 percent in March.
Further, Republican leaders are trying to move through Trump A big beautiful law law July through Congress before July. Trump will be expanded in this bill 2017 tax deductionSlash healthcare and welfare costs and debt increase.
Some MLAs believe that the bill may take up to August to approve the bill, but it is to increase the limit of the country. The non -biased Congress Budget Office has said that it will increase the federal loan by $.3 trillion by 33434.
This will increase the government’s debt-to-DGP (gross domestic production) from 124 per cent today and will raise concern about long-term debt sustaining. In the meantime, the annual deficit – when the state expenditure tax is higher than the tax revenue – the GDP will increase by 6.9 percent in 2024 about 6.4 percent.
Until now, Trump has tried to reduce the cost from the Government Efficiency Department of Elon Musk Drawing down more than expected?? And even though import duty has increased revenue for the government, American consumers – in the form of high cost – have paid them.
The result is that Trump’s unpredictable strategies, which motivated Moody’s rating agency Give the US government a strip of its highest credit score In May, the chances of American growth have decreased this year and the demand for its currency has been reduced.
According to the levels suggested by Futures Contracts, the dollar has also troubled the expectations that the Federal Reserve will reduce interest rates to support the US economy.
America is becoming a ‘less attractive’ destination?
The dollar is the world’s currency anchor due to its dominance in trade and financing. For example, in the 1980s, many Gulf countries started their currency on greenback.
The effect does not stop there. According to the Atlantic Council, 54 per cent of the world’s GDP fourth world exports were nominated for $ 223.
His dominance in financing is even bigger. About $ 60 per cent of all bank deposits are reputed in dollars, while about 70 percent of international bonds are quoted in American currency.
Meanwhile, 57 percent of the world’s foreign exchange reserves – assets kept by Central Banks – are kept in the dollar, according to the IMF.
But the dollar reserved position is supported by the US economy, its financial market and its legal system confidently.
And Trump is changing it. The bank, Safra Sarasin, says Carston Junius, “Investors have realized that they are terrorists of American property.”
According to the Apollo Set Set Management, foreign people have a US equity’s $ 3 trillion dollars, American TRIZI’s TRillion dollars and the TR trillion of the American corporate bond.
If investors continue their positions, the dollar value can constantly pressure.
“America has become a less attractive place for investment in these days … American property is not as safe as before,” Junius Al Jazira said.
What are the consequences of the lower-value dollar?
Many of the Trump administration argue that the US dollar reserved status costs higher than the benefits – as it increases the cost of US exports.
Stephen Miraan, chairman of the Council of Trump’s financial adviser, said that the high dollar assessment is “unnecessary burden on our companies and workers, making their products and workers globally.”
He said, “The dollar extremist assessment is a factor contributing to the loss of competitiveness over the years of the United States, and the rate is a reaction to this unpleasant reality.”
For the first time, the shy, the low dollar will really make foreign buyers cheaper and import imports more expensive, which will reduce the lack of trade in the country. However, these specific trade effects are in the flow of the dangers of running rates.
For developing countries, a weak greenback will reduce local currency costs to repay the loan, provide relief to large lenders like Zambia, Ghana or Pakistan.
Otherwise, weakening dollars should be carried out by the prices of goods, export revenue should be increased to countries that export agricultural goods like oil, metal or Indonesia, Nigeria and Chile.
Has other currencies done well?
Since the second term in Trump’s office, Greenback’s slide has made more damage to the outside economy of the United States, as well as the strengthening the currency against his competitors – the widespread estimate of his trade war will be further damaged.
Instead, the Euro is more than $ 1.17, with investors focus on the risk of growth in the United States. At the same time, the demand for other safe property, such as the German and French government bonds, has increased.
Weak dollars for American investors have encouraged equity investment abroad. Since the beginning of 2025, the Stoxx 600 index has increased by approximately 15 percent, comprehensive solutions to European shares.
Back to the dollar, it gets 23 percent.
In the meantime, inflation – to build a estimate – has dropped from 3 percent in January.
According to junius, there is no significant risk for the dollar status as the D Facto Reserve currency in the world soon.
But “does not mean that in the US dollar you can’t be too weak,” he said. “In fact, we continue to expect it now and at the end of the year.”
