The US dollar’s freefall continues, with a 10.8% decline against a basket of currencies in the first half of 2025, marking its worst performance in over 50 years. Donald Trump’s economic policies, including his tariffs and soaring national debt, have sparked an investor exodus from dollar-denominated assets, as the currency’s safe-haven appeal diminishes.
The pound has soared to a three-year high of $1.37 against the struggling dollar. David Morrison of Trade Nation points to Trump’s tariffs and the chaotic nature of his administration as key factors. Despite the dollar’s struggles, US stock markets have shown remarkable resilience, rebounding to a record high by the end of June. This “Taco” trade, implying a reversal of aggressive policies, and the “fear of missing out” on market gains have driven investor behavior.