In Reply to: Loomer speaks posted by mh on September 23, 2025 at 10:17:42
The US dollar is on track for its worst year in decades, as shown by the change in the US Dollar index for each year up until September 18.
The flop has been brought by policy missteps, economic uncertainty, and a global shift in investor confidence.
As of mid-2025, the US Dollar Index (DXY) has dropped about 10 to 11 percent against a basket of major currencies.
That’s the worst first-half performance in over 50 years, with it being the biggest decline since 1973.
The dollar is headed toward its worst year since roughly 2003, if the current pace holds.
What’s Dragging the Dollar Down
President Donald Trump’s aggressive trade policies, including sweeping and reciprocal tariffs, have unsettled markets.
Unpredictability around trade policy raises perceived risk for holding US assets.
The dollar has long benefited from higher interest rates in the US compared to many peer economies. But those differentials are narrowing.
Other central banks are moving, expectations of Fed rate cuts are growing, and yield parity is eroding. That makes the dollar less attractive.
Economic growth in the US has disappointed relative to expectations. With a rising federal deficit, concerns about debt sustainability, and increasing unemployment, these factors all contribute to lower confidence in the dollar.