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4w ago

U.S. Dollar Falls to Lowest Since 2022 as Traders Price Fed Rate Cuts

Investor concern over fiscal deficits, erratic trade policy, looming tariff deadlines has undermined the currency

Smythson sold its New Bond Street store last year during the slowdown in the global luxury sector
US senators are expected to vote into Tuesday morning on a series of amendments to President Donald Trump’s “Big Beautiful Bill”
U.S. dollar banknotes are seen in this illustration taken March 19, 2025. REUTERS/Dado Ruvic/Illustration

Overview

  • The dollar index slid to 96.688, its weakest level since February 2022, marking a drop of more than 10% in the first half of 2025
  • The euro surged to $1.179, up 13.8% in the January–June period for its strongest first-half performance on record
  • Traders are pricing in roughly 67 basis points of Federal Reserve rate cuts this year, eroding the dollar’s yield advantage
  • Senate debate over President Trump’s $3.3 trillion tax-and-spend bill is stoking investor worries about U.S. fiscal stability
  • Investors are watching the July 9 expiration of Trump’s 90-day tariff pause with erratic trade policy contributing to market volatility