The US dollar has endured a rough ride, marking its worst first half-year performance since 1973. A 10.8% decline against a basket of currencies is largely attributed to the turbulent economic policies of Donald Trump, including his trade tariffs and a “big beautiful” budget bill that raises concerns about escalating national debt. Investors are actively selling off the US currency, questioning its traditional role as a safe haven.
Chris Iggo of Axa IM Investment Institute noted strong broader market returns despite the dollar’s weakness, with risky assets quickly reversing any sell-offs. The S&P 500, after an initial dip, achieved a record high by the end of June, illustrating a surprising resilience in the face of currency instability. This recovery highlights the “fear of missing out” among traders betting on multiple US interest rate cuts.