Dollar’s Deepest Dive in 50 Years: Trump Tariffs Trigger Currency Sell-Off

The US dollar has experienced its most significant decline in over five decades during the first half of 2025, plummeting 10.8% against a basket of major currencies. This dramatic sell-off, the worst since 1973, is largely attributed to escalating geopolitical crises and renewed trade tensions initiated by Donald Trump’s administration. Investors are expressing deep concern that Trump’s economic policies, particularly his tariffs and a “big beautiful” budget bill predicted to inflate national debt, are eroding the dollar’s traditional role as a safe-haven asset.
Economists and market analysts point to a confluence of factors, including the uncertainty surrounding Trump’s trade wars with China, Mexico, and Canada, as well as his public criticism of the Federal Reserve and hints at interest rate cuts. This turbulent environment has led to a significant shift in investor sentiment, with many divesting from dollar-denominated assets. Despite a turbulent start, the S&P 500 staged a remarkable recovery, hitting a record high by the end of June, fueled by a temporary pause in tariffs and optimism around AI-driven earnings. Meanwhile, gold, a classic safe haven, has surged by 25% amidst the market volatility.