Overview

• The U.S. dollar has fallen over 10% against a basket of major currencies in the first half of 2025, its worst opening six months since 1973.
• Markets now price in several Federal Reserve rate cuts this year following President Trump’s public criticism of Chair Jerome Powell and mounting calls for looser monetary policy.
• President Trump’s One Big, Beautiful Bill is advancing through Congress and is projected to add more than $3 trillion to U.S. public debt over the next decade, deepening concerns over fiscal stability.
• The euro has surged about 13% to trade near $1.18, with ECB Vice-President Luis de Guindos saying the single currency could attain reserve status if Europe “does the right things.”
• Heightened volatility from tariff uncertainty and record deficits has challenged the dollar’s safe-haven status and intensified debate over a shift in the global currency hierarchy.