US dollar suffers worst start to year since 1973 | Donald Trump’s trade policies and rising debt levels have sparked decline of more than 10% in first half of 2025
Posted by ONETRILLIONAMERICANS
US dollar suffers worst start to year since 1973 | Donald Trump’s trade policies and rising debt levels have sparked decline of more than 10% in first half of 2025
Posted by ONETRILLIONAMERICANS
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> The US dollar has suffered its worst first half of the year since 1973, as Donald Trump’s trade and economic policies prompt global investors to rethink their exposure to the world’s dominant currency.
> The dollar index, which measures the currency’s strength against a basket of six others including the pound, euro and yen, has slumped more than 10 per cent so far in 2025, the worst start to the year since the end of the gold-backed Bretton Woods system.
> “The dollar has become the whipping boy of Trump 2.0’s erratic policies,” said Francesco Pesole, an FX strategist at ING.
> The president’s stop-start tariff war, the US’s vast borrowing needs and worries about the independence of the Federal Reserve had undermined the appeal of the dollar as a safe haven for investors, he added.
> The currency was down 0.2 per cent on Monday as the US Senate prepared to begin voting on amendments to Trump’s “big, beautiful” tax bill.
> The landmark legislation is expected to add $3.2tn to the US debt pile over the coming decade and has fuelled concerns over the sustainability of Washington’s borrowings, sparking an exodus from the US Treasury market.
> The dollar’s sharp decline puts it on course for its worst first half of the year since a 15 per cent loss in 1973 and the weakest showing over any six-month period since 2009.
I mean, hasn’t Trump been clamoring for a weaker dollar for 30 years, designing his policies for a weaker dollar and now celebrating this?
Something to keep in mind as equities reach new ATH, a lot of that is baked in due to the rapid devaluing of the dollar.
Lets say you If you have a $100,000 in stocks at the start of the year, and now it is worth $105,000 but the dollar is worth 10% less.
Your adjusted stock value is $94,500 and you are **down** 5.5% YTD.
Still better than if yo had cash in USD, at the same time worse off the if you had simply turned it all to Euros and stuck it in a bank account.
EDIT: If you are curious, $100,000 to Euros on Jan 1 and sitting fallow in a bank would be worth $113,000 plus whatever interest you got.