The US dollar has experienced a dramatic decline, with a 10.8% fall against a basket of currencies in the first half of 2025, marking its worst performance in over 50 years. The ongoing trade war initiated by Donald Trump and perceived discord with the Federal Reserve are significantly impacting the currency, diminishing its appeal as a safe-haven asset.

The pound has surged to a three-year high of $1.37 against the weakened dollar. Carsten Brzeski of ING Research described the first six months as “action-packed,” with tariffs, market volatility, and questions about Fed independence. Despite the dollar’s struggles, US stock markets, after an early April global sell-off, rebounded strongly, with the S&P 500 reaching a record high by the end of June, demonstrating market resilience and adaptability to policy shifts.