Greenback’s Grim Half-Year: Trade Wars and Fed Pressure Take Toll

The US dollar has suffered a grim half-year, with a 10.8% decline against a basket of currencies, marking its worst performance in over 50 years. The ongoing trade wars initiated by Donald Trump and his persistent pressure on the Federal Reserve to cut interest rates are taking a heavy toll on the greenback, 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.