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.