The US dollar has performed a tumbling act, recording its worst half-year performance since 1991, with a 10.8% decline against a basket of currencies. This significant drop is largely attributed to the tariff troubles initiated by Donald Trump and concerns that his economic policies are undermining the dollar’s safe-haven role.
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 triggered by “Liberation Day” tariffs, rebounded strongly, with the S&P 500 reaching a record high by the end of June, demonstrating market resilience and adaptability to policy shifts.