The US dollar has lost its luster, experiencing its sharpest drop since 1973 in the first half of 2025. A 10.8% fall against a basket of currencies is widely attributed to President Donald Trump’s tariffs and concerns that his economic policies are threatening the dollar’s long-held safe-haven status. The dollar index has fallen to its lowest level since March 2022.
The pound has surged to a three-year high of $1.37 against the weakened dollar. Chris Iggo of Axa IM Investment Institute pointed to strong broader market returns in the first half, with sell-offs in risky assets quickly reversing. The S&P 500, after a turbulent start to the year, remarkably achieved a record high by the end of June, fueled by hopes of interest rate cuts and the growing influence of AI in corporate earnings.
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