The US dollar has plunged to a 50-year low, experiencing an unprecedented currency sell-off in the first half of 2025. Its 10.8% decline against a basket of currencies, the worst performance since 1973, is directly linked to Donald Trump’s aggressive tariffs and the resulting concerns about the dollar’s safe-haven role.
The euro has gained 5% against the struggling dollar, as reported by Unicredit. Rising expectations of US interest rate cuts, fueled by Trump’s pressure on the Federal Reserve, have further hurt the dollar. Despite this, the S&P 500 of US stocks remarkably rebounded to a record high by the end of June. This 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.
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