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U.S. Dollar Holds Near Multi-Year Lows After Strong Jobs Data

Trade barriers, swelling deficits, global capital rotations keep the greenback under pressure after a temporary jobs-driven lift.

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U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria/File Photo

Overview

  • The dollar has slumped over 10% since January, marking its steepest first-half decline since 1973 and leaving the ICE U.S. Dollar Index near multi-year lows.
  • Republicans in the House approved a $3.4 trillion tax-cut and spending package this week, projecting a surge in budget deficits that further undermines foreign demand for U.S. assets.
  • June’s stronger-than-expected employment figures produced a brief rally, delaying market expectations for Federal Reserve rate cuts but failing to reverse the broader downtrend.
  • President Trump’s broad tariffs on imports and threats of additional duties set to take effect July 9 maintain trade-market uncertainty and exert continued downward pressure on the greenback.
  • Global investors are reallocating funds toward European and Asian markets while exploring de-dollarization options, though the U.S. dollar remains unrivaled as the primary reserve currency.