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yesterday

U.S. Dollar Climbs to Two-Month High as Investors Reverse Bearish Bets

Sharper-than-expected U.S. economic data paired with fresh EU tariffs favoring American exporters are driving investors to unwind bearish dollar positions

U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 9, 2025. REUTERS/Jeenah Moon/File Photo
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Overview

  • The dollar index reached a two-month peak and is set for its first monthly gain of 2025 with nearly a 3% rise in July
  • Major fund managers and hedge funds have closed out bearish dollar positions amid renewed confidence in U.S. growth and policy stability
  • A new EU-U.S. trade framework imposing 15% tariffs on most European exports has pressured the euro below $1.15, marking its steepest monthly decline in over two years
  • U.S. reports showing a narrower June goods trade deficit, July consumer confidence above forecasts, a 104,000 ADP payroll surge and a 3.0% Q2 GDP increase have bolstered dollar demand
  • Futures markets assign low odds to near-term rate cuts by the Federal Reserve or ECB, reinforcing the shift into dollar and U.S. assets