President Donald Trump’s sweeping tariffs have caused the U.S. dollar to suffer its worst first half performance in more than 50 years, as currency is being sold off due to his economic policies and geopolitical concerns. As a result, U.S. dollar-denominated assets are no longer the safe haven they used to be, and investors are concerned about the President’s “big beautiful” budget driving the country’s national debt higher.
The sell-off has brought the dollar index down to its lowest level since March 2022, with the dollar having fallen by 10.8 percent against other currencies since the start of this year, making it the worst performance since the end of the first half of 1973 and the second half of 1991.
Analysts at UniCredit have called the U.S. dollar “the most notable loser so far this year,” while alternatively, the euro has enjoyed a five percent gain, with the UK one of the best-performing regions globally for investors in the first half of the year.
“Tariffs, downgrades to earnings and economic forecasts and geopolitical conflict were the defining factors for markets in the first half of 2025,” said Dan Coatsworth, an investment analyst at AJ Bell. “They’ve caused considerable uncertainty which has affected asset prices, as well as business and consumer confidence. It’s led to one of the biggest shifts in investor preferences for years, with certain parts of the market coming to life and previous winners losing their crown. We’re now seeing the great big asset allocation reset and the U.S. is no longer top choice for many investor portfolios.”
